German stock market is not affected by the Greek debt revolution while Athens is running out of time

Mario is pointing the figure to Greece today in Frankfurt. Mario Draghi, President of the European Central Bank (ECB audiovisual services, 2011)

Mario is pointing the finger to Greece today in Frankfurt.
Mario Draghi, President of the European Central Bank (ECB audiovisual services, 2011)

More than a week has passed since the Greek elections and the main European markets, except for the Greek one, do not seem to be influenced to a great extent by the victory of the left-party SYRIZA. The attempt of the Greek Prime Minister to calm down not only the markets but also the European leaders about his intentions not to exit the European Union and not to turn to Russia for financial aid has proved positive.

This climate is not just directed by Alexis Tsipras’ sayings but is more due to the announcement of Mario Draghi, the president of the ECB, about the implementation of the new monetary policy programme, Quantitative Easing (QE), that finally came to the light a few days before the Greek elections and it hasn’t been fully incorporated into the markets.

Furthermore, the President of the ECB doesn’t want Greece to spoil his efforts to revive the Eurozone economy and is not going to let a Greek bailout plan being promoted during his meeting today with the Greek Finance Minister.

Europe vs. Greece

The performance of the main European markets expressed by their respective European indices is slightly negative (except for the German index) in the period between 26 January and 02 February.

During this week, Deutsche Boerse AG Stock Index DAX (Germany’s main index- traded on the Frankfurt stock exchange) increased by 0.94%. However, CAC 40 which represents the French market dropped from 4675.13 to 4613.09 revealing a decrease of 1.33%. The same trend is followed by FTSE 100, the index that contains the 100 most highly capitalized companies traded on the London Stock Exchange, which closed at 6764.83 at the end of 02 February, thus decreasing by 1.28% since 26 January.

Looking things from a European level and perspective through the STOXX Europe 600, an index that represents large, mid and small capitalisation companies across 18 countries of the European region, we see that this index dropped by just 1% during this period; it is thus clear that the outcome of the Greek elections had rather small impact on the European markets.

However, the market that experienced the greatest drop and is by far the most volatile compared to the aforementioned markets is the Greek one represented by the Athens Stock Exchange General Index. More specifically, the Greek index dropped by 7.63% in only 7 days. This implies that the Greek market has been influenced by the elections more than the rest European markets.

The effect of QE in the European markets

The policy programme that the ECB announced has not yet been put into implementation but it has already affected the European investors positively and has not let the European markets drop dramatically due to a possible “GREXIT”. Moreover, the fact that it came and it came “big” (1.14 trillion euros) at a moment that deflation figures become apparent all over Europe brings hope and lowers the negative effect that the victory of Alexis Tsipras alone would have. This programme has substantial potential and is greatly appreciated by the European community that hopes to see inflation rates rising again up to the desired level of close but below 2%.

February 16: a crucial day for Europe

February 16 is a very important and crucial date not only for the markets but also for all the European citizens and especially the Greek ones. The Eurogroup will take place then in Brussels and the main discussions between the European nations will include Greece’s debt. Will the Greek government be able to convince the rest of Europe that they have a solution-restructuring debt programme that is viable and beneficial for both sides?

Till then, the Greek government is travelling around Europe to find allies to support its programme. The Greek Finance Minister Yanis Varoufakis has already visited Paris, London and Rome in order to discuss with his counterparts and reveal details of the plan that Greece is going to put on the table in a few days. The countries visited are well-targeted by the Greek government which is focusing on the fact that they also want to stop austerity measures as the only solution to the financial crisis.

However, the next stop is Frankfurt where Yanis Varoufakis will meet today Mario Draghi to discuss about Greece’s debt in an already strained climate. The ECB has already announced its intentions about the refusal of the Greek Finance Minister’s plan who wants to issue short-term Treasury bills of 10 billion euros in order to finance the economy for the next few months. His plan is going to fall short against Mario Draghi who knows that Greece greatly depends on ECB’s decisions and money and will be very “tough” against the Greek government’s representative. Nevertheless, it is quite certain that there will be some constructive discussions and possible alternative proposals between the two men.

Let’s just hope that our European leaders will be reasonable in the end and not let Europe drop into another recession. That would be a possible fruit of too long Greece-EU negotiations or Berlin’s lack of will to make a step back; please the new Greek government and most importantly convince Marine Le Pen’s and Podemos’ electorate that Europe does not work only as a multinational company but as a political construct as well.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Cameron’s “No Brexit” campaign wins top business support as Tory front breaks

UN member states express their will to tackle global migration but specific actions are still missing

Changing for the change: Medicine in Industry 4.0

The representatives of the regions and the cities know better what the EU needs on migration, trade, poverty and taxation

Resisting EU budget cuts

Huawei answers allegations about its selling prices

Economic recovery won’t tackle youth unemployment problem

Responsible Artificial Intelligence

Progress in medical research: leading or lagging behind?

European Business Summit 2014 Launch Event: “Energising Industrial Growth”

EU’s new sanctions on Russia into force “in the next few days”: strength, weakness or strategy?

EU Commission: Growth first then fiscal consolidation

Alice in Colombia

Why impoverishment and social exclusion grow in the EU; the affluent north also suffers

LEAGUE OF YOUNG VOTERS LAUNCHES TOOL FOR YOUNG PEOPLE TO COMPARE POLITICAL PARTIES AHEAD OF EU ELECTIONS

Medical students: The need for emigration

European Youth Forum welcomes the European Commission’s proposed revision of the Union Code on Visas, however it does not go far enough

Youth platforms call on German Government to break down legal barriers for young volunteers and pupils

More solidarity and interaction between generations needed to challenge age stereotypes and ingrained ageism

Did Draghi ask the Germans to accept a drastic change of austerity policies?

Banks get trillions and the unemployed ECB’s love…

Contact the Sting

Who is to profit from the quasi announced ECB rate cut?

European Youth Forum and youngest MEPs call on President Juncker to keep his promise to Europe’s youth

Regional competitiveness and growth: a Gordian knot for Europe

Europe again the black sheep at the G20 Finance Ministers and Central Bank Governors

Quality Internships: Towards a Toolkit for Employers

Migration crisis update: The “Habsburg Empire” comes back to life while EU loses control

Brexit kick-off: a historic day for the EU anticlockwise

European Youth calls on European Council for urgent action on “humanitarian crisis” and questions the EU/Turkey deal respect of human rights

Why medicine is relevant to the battle against climate change

The MH17 tragedy to put a tombstone on Ukrainian civil war

Does Switzerland really need more medical students?

Macron’s Presidency: what the young generation’s expectations are

Rehn very reserved about growth in Eurozone

Why Eurozone’s problems may end in a few months

Trump stumbles badly on his Russian openings; Europeans wary of Putin

Why Europe is more competitive than the US

Social inclusion: how much should young people hope from the EU? 

Uncovered liabilities of €5 billion may render EU insolvent

The Commission tells Berlin it is legally obliged to help Eurozone out of stagnation

How Germany strives to mold ECB’s monetary policy to her interests

US, Russia oblige each other in Syria and Ukraine selling off allies

ECB asks for more subsidies to banks

Climate change will never be combatted by EU alone while some G20 countries keep procrastinating

Commission criticised member states on blocking financial transaction tax

Movius @ MWC14: Discussing novel Communications Applications over a “CAFÉ”

The ECB tells Berlin that a Germanic Eurozone is unacceptable and doesn’t work

EU Commission: a rise in wages and salaries may help create more jobs

More capital and liquidity for the banks

Migration has set EU’s political clock ticking; the stagnating economy cannot help it and Turkey doesn’t cooperate

Berlin and Paris pursue the financial fragmentation of Eurozone

Is it just visa-free travel that Erdogan demands from the EU to not break the migration deal?

Eurogroup: IMF proposes Germany disposes

Eurozone set to abandon monetary and incomes austerity and adopt growth friendly policies

China Unlimited and the Chinese dream

“As German Chancellor I want to be able to cope with the merger of the real and digital economy”, Angela Merkel from Switzerland; the Sting reports live from World Economic Forum 2015 in Davos

COP21 Paris agreement: a non legally-binding climate pact won’t stop effectively global warming while EU’s Cañete throws hardest part to next Commission

Eurozone needs more than some decimals of growth

The umpteenth Italian overturn takes Renzi and PD to unprecedented victory at EU elections

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s