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

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

NASA has released new photos of the Apollo 11 moon landing

Korea should improve the quality of employment for older workers

This lethal fungus is threatening to wipe out the world’s bananas

Implementation of tax transparency initiative delivering concrete and impressive results

EU is officially in recession

This Japanese company pays its employees to get a good night’s sleep

Collaboration: the key to success in the digital economy

Security Council condemns attacks on Afghan security forces which killed at least 27

Taxation: Commission refers Germany to the Court for its failure to apply EU rules on VAT for farmers

Don’t let smoking steal life’s breathtaking moments, urges UN health agency

Eurozone cannot endure any longer youth marginalisation

EU and Mercosur reach agreement on trade

5 things you might not know about Leonardo da Vinci

A 550 km-long mass of rotting seaweed is heading for Mexico’s pristine beaches

Metrics of the Sustainable Developments Goals: Can we trust our data?

Joint U.S.-EU Statement following President Juncker’s visit to the White House

To keep track of the SDGs, we need a data revolution

These countries have the most expensive childcare

Iceland’s slowdown underlines the need to fix structural issues

Universities need strategic leadership. Here’s what it looks like

These five exercise trends will help society and your health

European Commission reacts to the US restrictions on steel and aluminium affecting the EU

MWC 2016 LIVE: The top 5 themes of this year’s Mobile World Congress

Family businesses are the lifeblood of the Middle East. How do we ensure they survive?

Brexit: reciprocal visa-free access for EU and UK nationals

From farms to supermarkets: MEPs approve new EU rules against unfair trading

Central Africa: Security Council concerned by ‘grave security situation’, calls for better agency cooperation

Where are the charities in the great Artificial Intelligence debate?

Paris, Washington, IMF against Berlin and ECB on money and interest

America’s student debt crisis explained

EU agricultural production no more a self-sufficiency anchor

International Day of Cooperatives sets stage for long-standing production and consumption

Youth and Participation: are the people rising up in Spain? 


The world wide web is 30. Here are 8 things you should know about it

Antitrust: Commission consults stakeholders on guidance for national courts when handling disclosure information

Germany openly seeks more advantages for its banks

Your smartphone may know more about your mental health than you

Air quality: Commission takes action to protect citizens from air pollution

Why did Cameron gain absolute majority? What will he do now? Will he vote ‘yes’ in Britain’s in – out EU referendum?

Europe plans to send satellites into space to monitor CO2 emissions

Remain united for Syrians, UN envoy de Mistura urges Security Council

UN chief urges Hamas and Israel to ‘step back from the brink of another devastating conflict’ in Gaza

Nauru President warns of possible climate change ‘economic Armageddon’

Ecofin: ‘The Friday battle’ for the banking union

Learn from the margin, not the center: digital innovation with social impact as transformative force bridging digital divide

MWC 2016 LIVE: Ericsson/Cisco partnership on track, insist execs

The ‘ASEAN way’: what it is, how it must change for the future

How to make PHC a favourable career choice for medical students: Strategies and reflections

10th ASEM in Milan and the importance of being one: EU’s big challenge on the way to China

‘We are nowhere closer’ to Israeli-Palestinian peace deal, than a year ago, Security Council hears

2018 ‘terrifying’ for Yemenis but ultimately a ‘year for hope’ says UN Special Envoy

EU and U.S. castigate Facebook on Cambridge Analytica scandal as citizens’ data privacy goes down the drain again

Security Council must ‘come together’ to address the plight of children trapped in armed conflict, says UN envoy

The European Parliament declares climate emergency

As urbanisation grows, cities unveil sustainable development solutions on World Day

The world needs a grand coalition to tackle climate change

Force used against protestors in Gaza ‘wholly disproportionate’ says UN human rights chief

UN global education envoy urges new funding for ‘lost generation’ of children forced out of classrooms by conflict

Brexit: Six more months of political paralysis or a May-Corbyn compromise?

Trade, entrepreneurship and the future of ASEAN’s economy

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 )

Google photo

You are commenting using your Google 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 )

Connecting to %s