During the last two weeks fears about the future of the eurozone have intensified as government borrowing costs for Italy and Spain, two of the region's highly indebted nations, have spiralled to unsustainable levels. Borrowing costs among stronger countries including France have also risen. However. in the past two weeks there has been a 93% increase in the number of transactions where people transferred money out of euro bank accounts into UK sterling accounts. The figure, from foreign exchange company World First, represents an increase to almost 300 transactions in the past fortnight compared with 154 over the same two-week period last year. Most of World First's customers are based in Italy, Spain and France, and the typical minimum transaction value is at least €1,000 (£856). "It is clear that most people have had enough of hoping for the best with the situation in the euro zone and have decided to take some decisive action," said Jeremy Cook, chief economist at World First. "Now the crisis seems to be infecting the European core, as opposed to just the periphery, people are worried that a real collapse could be just around the corner," Mr. Cook added. I - the owner of this blog, - agree an would be more than happy if Europe closes the chapter on Euro !
Access Investments-Building Awareness - European Union-ROMANIA
Sunday, November 20, 2011
"I say - The chapter on Euro should be closed asap."
During the last two weeks fears about the future of the eurozone have intensified as government borrowing costs for Italy and Spain, two of the region's highly indebted nations, have spiralled to unsustainable levels. Borrowing costs among stronger countries including France have also risen. However. in the past two weeks there has been a 93% increase in the number of transactions where people transferred money out of euro bank accounts into UK sterling accounts. The figure, from foreign exchange company World First, represents an increase to almost 300 transactions in the past fortnight compared with 154 over the same two-week period last year. Most of World First's customers are based in Italy, Spain and France, and the typical minimum transaction value is at least €1,000 (£856). "It is clear that most people have had enough of hoping for the best with the situation in the euro zone and have decided to take some decisive action," said Jeremy Cook, chief economist at World First. "Now the crisis seems to be infecting the European core, as opposed to just the periphery, people are worried that a real collapse could be just around the corner," Mr. Cook added. I - the owner of this blog, - agree an would be more than happy if Europe closes the chapter on Euro !
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3 comments:
I'll keep my euro bank accounts in Austria and Germany thank you. Besides the 4-5% yearly interest I get, they have increased over 30% against the pound in the last 5 years.
The only thing that would persuade me to change them would be if Merkel listens to Cameron's pleas to start printing money in the style of the BoE. Then the euro will fall, just like the pound has fallen due to QE
not to many of them though ...They are being a little silly. If countries leave the eurozone, only the economically strong states will remain (Germany, denmark, benelux, probably France). The euro will go up against the pound.
The risk that the euro could break up is now so pressing that Nomura Holdings is advising investors to check the small print on their bonds, as legal frameworks may determine whether the assets stay in euros, or switch into "new" currencies that are expected to rapidly depreciate.
The Japanese bank's report, released Friday, is thought to be the first major practical study of what a splintering of the 17-country currency would be like for investors, and is a sign that the once improbable prospect of euro disintegration is becoming a serious concern.
"Breakup risk is for real," said Jens Nordvig, senior currencies analyst for Nomura in New York and author of the 12-page paper.
The report, which focuses on Greece, urged investors to "pay close attention to the redenomination risk of various assets" and whether the euro-area bonds or other instruments they currently hold are issued under English law, or local law.
Bonds issued under local law, such as Greek law, would likely be converted from euros into a new local currency—a blow to any investors left holding the paper. "New" currencies, such as a new drachma, could rapidly fall in value by as much as 50%, according to most estimates.
Foreign-law debt, on the other hand, would be more likely to remain in euros, assuming a smaller euro still existed at all, the bank said.
If the euro broke up altogether, contracts would likely be redenominated into the currencies tied to their base country—a complicated task in itself—or they would be settled in a new European Currency Unit. In the most likely scenario, each currency would be linked to the ECU, as they were before the euro's birth in 1999.
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