The euphoria over the EU deal to bailout the Spanish banks lasted just a few hours, as the market eventually understood that the “deal” showed more indecisiveness from the European Union. As a result share prices tumbled, the Euro became less valuable and countries like Spain and Italy are now borrowing at higher rates of interest that medium sized businesses pay for their money (if they can get it) in the United Kingdom. I rather suspect that the deal and the markets’ reaction to it will not encourage the Greeks to vote to support continued austerity. What is the point, after all, if you are better out of the euro than in it?
Posted on June 12, 2012 by Robert Kyriakides