News from Greece dominated yesterday’s news. Sources suggest Greece will ask for a longer bridging loan, until September, and also propose new measures to replace what they consider the unacceptable parts of the existing bailout. However there is no suggestion, yet at least, that European leaders will back it the proposal.
Rating agency Moody’s cut the credit rating on five major Greek banks, as fears over the country’s future in the eurozone continue to swirl.The Athens market fell 6%, as bank shares suffer new double-digit falls. Fears that Greece might default also drove yields high into dangerous territory; the three-year Greek bond hit levels not seen since its 2012 restructuring.
Greek finance minister Yanis Varoufakis has warned that it would be catastrophic if the eurozone collapsed. He said allowing the single currency to fragment would be catastrophic stating it is the moral duty of the critics of the Euro Zone to fix it, to make sure it doesn’t collapse because if it does the cost will be immense not just for the Greeks but the Brits, everyone.
While concerns continue around Greece, Germany has exported more goods than ever before. Data released yesterday showed, German seasonally-adjusted exports hit a record high in December, up by 3.4% month-on-month, There was bad news for foreign companies looking to sell to Germany – imports dropped by 0.8% month-on-month. That helped to push Germany’s trade surplus to a record high of 21.8B Euros.
This morning George Osborne has warned that the risks of a very bad outcome from the ongoing Greek debt crisis has risen. Speaking to Bloomberg TV he said there is a growing danger that the deadlock over Greece’s bailout programme spirals out of control, stating that it could potentially cause serious damage to both the European economy and the UK economy.
GBP - 09:30 : UK Industrial Production (Jan) YoY expected to fall to 0.7%from 1.1%
GBP - 15:00 : UK NIESR GDP Estimate (3M)
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