A busy week for EU economic data, Greece is once again in the spotlight with further bailout loan agreements in discussion.
Turning the focus to the Eurozone economic data has been rather mixed of late but as highlighted in my Pound Sterling forecast GDP has been better on the continent than in the UK. However, politically we have the next hurdle for the single currency with the on-going Greek crisis coming into the spotlight.
The International Monetary Fund has proposed that Greece should not make payments on its bailout loans until 2040, which is likely to upset the various Eurozone finance ministers. The IMF wants all of the payments on European loans granted to Greece since its first bailout six years ago to be deferred until 2040 with the maturity dates extended until 2080.
The IMF have suggested that if this does not happen then the debt to GDP will rise to as much as 293% by 2060.
The Eurogroup meeting will take place tomorrow with the various Eurozone finance ministers involved and Greece is likely to be the main topic on the agenda. I would be surprised to see any real resolution following the meeting and I think this could cause some uncertainty for the single currency potentially causing weakness.
Also due in the morning is German GDP data for the first quarter. As the powerhouse of Europe this is a key barometer as to the health of the Eurozone’s economy and any change in the estimate of 1.3% year on year could cause movement for the Euro vs Sterling.
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