Prospects for the development of the debt crisis in the euro area - an issue that worries many, especially those who are closely following the fate of all European assets. Once one of the most stable regions, today tells us about the existence of an enemy that can not be overcome alone. Greece, Ireland, Portugal, Spain, this is not a complete list of European countries, which some time ago, faced with serious challenges to service their sovereign debt.
In the upcoming weekend in Athens ahead of parliamentary elections. Depending on which political party wins, it will be possible to talk more specifically about the fate of Greece. Yes it is because the Greek problem is a difficult financial problems, and problems that have escorted the country almost from the currency bloc. Many analysts, including the RMB company, believe that Greece simply must do everything to keep its membership in the European Union. This is sort of a signal to public opinion, which will be made as early as this Sunday.
According to the Prime Minister of Greece Lucas Papadimosa, to clean up public finances and restore the competitiveness of the country is only possible with the support of European financial institutions. With regard to the consequences of secession from the Union, they would have been devastating: rising inflation, falling real incomes and, because of lack of investor confidence, the collapse of the banking system. There are economic models that predict that inflation could accelerate to 50% and real GDP to continue to decline and will decrease by 30%. If you add more here, and social consequences, it becomes obvious that Sunday's election, in the truest sense of the Greeks will vote for their own future. For potential investors, it's a great opportunity to perhaps the most promising and lucrative deal this year. Risky assets are likely to demonstrate the wonders of volatility.
Greece is not all problematic Europe. Not so long ago, another European country, has a caliber of more, too, appealed for financial support in the EU. We are talking about Spain, which agreed to provide EUR 100 billion for the recapitalization of the banking system. Of course, this is not the sum of irreversible and credit, which immediately imposes on certain debt obligations of the borrower. The maturity of the loan for 10-15 years with a rate of 3% per annum. Memorandum of Understanding with the EU on this issue must be signed with the 21-28 June.
Many investors, believing that the situation in Europe is closer to the point of no return, it is believed that the financial assistance to banks in Spain will not be able to stop the spread of an overwhelming debt crisis. And it became quite anxious when the ranks of the troubled regions of Italy has expanded. Yield recent ten-year bonds exceeded 6.3%, which is a maximum in January of this year. On Tuesday, June 13 Italy has sold treasury bills with maturity of 364 days at 6.5 billion euros. The weighted average yield at placing jumped to 3.972% from 2.34% at the previous auction, held on May 11. Given such a yield, we can say that this place was a disaster. With regard to financial assistance, if Italy go for it, would be a colossal sum of the estimated investment and consulting corporation RMB company can make more than 300 billion euros.
Monetary unit is clearly experiencing now is not the best of times, but as they say, there is no problem that can not be solved. Since the EU was created to promote economic and social progress, it is clear that the exclusion of a member country, will point to the apparent weakness of the whole region. It should not be allowed. Especially if we consider mainly the economic consequences of such a scenario can be summarized that Europe itself, lacking unity, and will suffer the most.
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