Kings have to listen.
Great Salesmen know that the customer has to be heard. The European leaders just failed to listen to each other.
Posturing cost the markets billions of dollars as they kept on delaying a final
decision.
Europe showed a lack of leadership skills when they walked
out without discussing the compromise
proposal of European Commission President Jean Claude Juncker. . The current assistance program expires at the end of February.
It is then the funding risks imposed on the Greek banks that
should worry. There is a natural flight to quality from these Greek banks
and estimates of deposit withdrawals are that it could be $ 2 billion per week.
Volatility in markets do not help
markets. Europe's financial
markets are fragmented. Private investment in euro area has fallen from 20 % of
GDP in 2008 to 16 % in 2013; in Greece, Portugal and Spain, it has declined
between 6 to 9 percent (Bank of Greece estimates)
Greek authorities planned
a renegotiated restructuring of the country's debt, most of which was owed to
official sector institutions. Greece has not indicated that it would leave the
euro area. Europe is yet to be a great
team. In the meantime, them banks!
Without any
risk or responsibility.
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