Europe’s banks alone are currently sitting on $1.19 Trillion of Spanish, Portuguese, Italian and Irish debt. They are all likely to face a wave of massive losses if Greece was to exit the Eurozone, causing a rise in the cost of borrowing for many weak nations in Europe.

Europe’s banks alone are currently sitting on $1.19 Trillion of Spanish, Portuguese, Italian and Irish debt. They are all likely to face a wave of massive losses if Greece was to exit the Eurozone, causing a rise in the cost of borrowing for many weak nations in Europe.

The EU summit closed without conclusive actions as there were many disagreements between the conservative and socialist premiers. French and Spanish presidents both pushed for the introductions of the Euro bonds to help lower the borrowing costs for weaker economies. This was however strongly protested by German Chancellor, Angela Merkel, as she does not wish for German tax payers to help finance economies that do not wish to implement austerity.

Head of the IMF Christine Legarde put in strict words that Greece should continue its public sector cuts in order to stay in the Eurozone. However, she also gave the strongest indication yet of a Greek exit, informing all nations to start making contingencies plans for the inevitable.

The BoE was once again split in the latest monetary policy minutes. Even though interests rates were left at record lows of 0.5% the MPC were split 8-1 on further QE. The decision was finely balanced for many of the members and the committee will continue monitoring on monthly basis and further stimulus could be added if warranted.

The race between the three major currencies is led by the US dollar, with Sterling also holding its strength due to its temporary safe haven status and the Euro continuing to lose with further falls expected in the long run.

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