Investing.com - Financial Markets Worldwide

World: Germany Conciliatory To Greece And Embrace QE?

ByThe National Bank of Canada
Published 08/22/2012, 09:03 AM
Updated 05/14/2017, 06:45 AM
NOTE
-0.24%

Financial markets are trading on the assumption that Greece will get a break on the fiscal targets previously laid out for its bailout program. We concur. As today’s Hot Chart shows, the Greek economy is on a contraction path similar to that experienced in by the U.S. during the great depression. Under these circumstances, we would think that it is in Germany’s interest to be conciliatory with Greece and modify the terms of austerity. If not, the country will not be able to withstand the current economic pounding for much longer without leaving the monetary union. This also buys time to set up the ESM and the single bank supervisor. The main challenge after that will be German acceptance of the ECB plan being designed for “conditional open-ended” purchases of short-term sovereign debt. As shown, it is interesting to note that for all of the critiques that the U.S. is facing about its slow recovery, a number of Euro-zone countries are faring much worst, double-dipping in many cases (ES,PT,IT,IR). Unless growth soon resumes, this sets the stage for a potentially massive quantitative easing. Notwithstanding recent comments by Mrs. Merkel, we remain sceptical that Germany would embrace such a plan.
Germany conciliatory to Greece and embrace QE

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.