The Euro is continuing to increase in strength against the British Pound thanks to increasing optimism emerging from the single currency bloc. This time there’s some good news emerging out of Greece for once.
European finance ministers have granted the next disbursement of bailout funds for struggling Greece praising Prime Minister Antonis Samara’s government for its efforts to tackle the country’s devastating economic difficulties.
At a meeting yesterday in Brussels, the Euro finance chiefs gave the green light for the payout of 9.2 billion Euros ($12.3 billion). Of the funds, 7.2 billion Euros in bonds are for the further recapitalization of Greek banks and 2 billion Euros in cash are to cover the government’s budget needs.
The lack of drama in the decision pales in contrast to the last time where ministers threatened to withhold the funds if Greece didn’t get its house in order. The trouble-free nature of this latest bailout has caused investors and economists to feel increasingly confident in the Greek government and its ability to press ahead with much needed budget cuts and policies to make Greece more competitive.
“We perceive a greater commitment to keep Greece in the currency union, if it complies with the program,” London-based Morgan Stanley analysts including Daniele Antonucci said in a report yesterday. “Many transitory support measures have already been extended, more will come.”
European Policy makers have given Samaras an extra two years (until 2016) to meet their budget cutting targets.
“We noted with satisfaction that the milestones for January have been achieved,” Luxembourg Prime Minister Jean- Claude Juncker, who led the Brussels meeting of euro-area finance ministers, told reporters.
With the recent spate of gains for the Euro it seems that Mario Draghi’s plans for ‘positive contagion’ are working. However, it remains to be seen just how long traders and investors are willing to be blinded by all the so-called good news. The Eurozone is still suffering from massive unemployment, civil unrest and massive debts, things that all the positive talk in the world cannot cover up forever.
The Pound to Euro exchange rate is currently trading at 1.1863
The Pound to US Dollar exchange rate is currently trading at 1.5840
The Pound to Australian Dollar exchange rate is currently trading at 1.4986
The Euro to US Dollar exchange rate is currently trading at 1.3348
The Euro to Pound exchange rate is currently trading at 0.8426
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