The lack of progress in regards to Greece’s primary surplus targets is fuelling concerns that the country will fail to meet its debt repayments. This has caused chancellor George Osborne to “step up” Britain’s contingency planning.
Time will tell whether the European Central Bank’s (ECB) €1.1tn quantitative easing (QE) package will have the desired impact on the real economy. Beating deflation is the paramount objective – how many times does the ECB have to reiterate its explicit mandate of maintaining price stability
A Syriza election victory would obviously increase Greek credit risk – i.e. the higher probability of a country default – and raise concerns of a Greek exit from EMU. On balance, however, we believe that the market implications should be relatively contained.
