Euro Could Survive Greece Exit

Yesterday, Greek Finance Minister Evangelos Venizelos said the negotiations in Athens were “so tough that as soon as one chapter closes another opens”. The negotiations will continue today, as Greek party leaders meet in the afternoon. Meanwhile, two of the largest Greek public-sector unions today began a strike in protest of the coming austerity program.

The EU, IMF and European Central Bank have made further spending cuts, labor market reforms and bank rescues a condition of extending a new bailout. Deadlines have come and gone during the negotiations, but Greece faces one unavoidable deadline on 20 March – a 14.4bn euros debt repayment that it cannot currently afford to pay. If these conditions are not met, Greece faces inevitable default.

There has been growing speculation that Eurozone leaders are preparing the way for a Greek exit from the single currency. Greece exit would not end euro, says, European Commission Vice President Neelie Kroes. “It’s always said that if you let one country get out, if it asks to get out, then the whole structure collapses. But that’s simply not true”, Ms Kroes told to the Dutch newspaper Volkskrant.

A similar optimistic message was delivered by Jean-Claude Juncker, chairman of the “Eurogroup” of Eurozone finance ministers – “The euro will outlive us all”, he said.

Source: BBC

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.