European Markets Tremble as Greek Referendum Shakes Confidence
LONDON, November 3, 2011 /PRNewswire/ --
After the Greek Prime Minister suggested a referendum on the new bailout package on Monday, exchange rates swing as European markets hit confusion
Financial analysts and economic experts are expecting continued trade uncertainty in the wake of the Greek Prime Minister's suggestion of a referendum into the EU's latest bailout program.
According to experts at Currencies Direct, the currency exchange experts, the market has seen huge swings in the two days since George Paprandreou's announcement, as traders attempt to compute what is going on in the Eurozone.
With increasing debt and a dwindling GDP, Greece looks close to meltdown. The Greek Prime Minister, whose majority slipped to just 2 seats following further resignations from his party, proposed a referendum which may never occur if he loses his hold on government.
George Paprandreou's actions came just weeks before the IMF's latest tranche of Greece's bailout package is due to be paid.
In response to the growing crisis, the Eurozone called an emergency meeting of its top economic ministers ahead of this weekend's G20 meeting at Cannes. The result was a stern ultimatum from Angela Merkel: accept the package, or forget about your next payment from us.
With the Eurozone ministers now threatening to withhold the $8bn tranche - vital to pay Greek public sector workers - Greece may face total collapse if it does not accept the austerity package.
And whilst the referendum may never happen, the announcement has guaranteed months of speculation and market uncertainty.
Nevertheless, in a more positive swing, the UK's 3rd GDP came in higher than expectations, at 0.5%. Whilst analysts are not yet certain how to explain the data, the results suggest a quiet confidence in the UK market which may aid stability throughout the Eurozone's impending turbulence.
A spokesperson at Currencies Direct quoted on how this turmoil is affecting the international money exchange market by saying: "The combination of the referendum and surprise G20 represents just how deep the crisis affects the Eurozone and wider economy. The currency market has seen an unprecedented amount of volatility in all currency pairs and so much so the ECB has been forced to lower interest rates as a tool to spurn the ailing economies back into the black. Until there is some cohesion between the European leaders and a sustainable path out of this crisis we expect the markets to move in big swings still."
Currencies Direct http://www.currenciesdirect.com with more than £1bn annual turnover is one of Europe's leading non-bank providers of international payment services. Since its formation in 1996 Currencies Direct has maintained its focus on being an innovative service provider of foreign exchange transfers for consumers and high net worth individuals with an extensive client base of 200 000. The company has also expanded its services to provide dynamic and pioneering 'business to business' solutions to help companies, tier 2/3 banks and other non-bank financial institutions process their international payments.
Head quartered in the City of London (United Kingdom) with operations in Europe, Africa, Asia and the United States, Currencies Direct is part of the Azibo Group, a privately owned investment company http://www.azibogroup.com .
Currencies Direct can typically save clients up to three per cent of the value of the property or investment purchased abroad, compared to mainstream banks, by providing commercial rather than retail rates to its customers. Transfers are free for all transactions over £5000 and those wishing to make regular transfers abroad every month also benefit from fee-free transactions.
SOURCE Currencies Direct