Greek Finance Minister Yanis Varoufakis presented his European counterparts with four principles for a new financing deal, as Greece battles to stave off a cash crunch and stay in the Eurozone currency bloc. Greece wants a deal that provides for financial stability, financial sustainability and debt restructuring, while addressing Greece’s humanitarian crisis.
However at the end of the Eurogroup meeting, the Greek finance minister and European officials failed to even agree on a statement regarding the progress of talks. With Greece’s bailout from the European Union, ECB and IMF set to expire in February, the delay in announcement will continue to cause fear that Greece could default on its debt.
According to economists polled by Reuters there is a one-in-four chance that Greece will leave the euro this year. They also predicted the Eurozone will be in deflation for most of 2015, despite the European Central Bank’s €1.1tn programme of quantitative easing, announced last month. Consumer inflation is likely to remain negative until the fourth quarter, the poll suggested. Inflation in the 19-member region is currently -0.6% and if economists are correct, it would signal the longest run of falling prices since the euro was first introduced as a currency in 1999.
Standard and Poor’s stated yesterday that the risk of contagion from Greece is low. They said that Greece’s risk premium has drastically increased again recently but the panic has not leapfrogged over to other former crisis countries. On the back of uncertainty surrounding Greece and upbeat UK economic data, the pound has hit a seven-year high against the euro.
GBP - 10:00 : Bank of England Quarterly inflation report#
USD - 13:30 : US Retail sales figures (Jan) Expected to be higher at -0.5% from -0.9%
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