Currency Update - What Is Happening To Europe?

Published on 18/11/2011 in Your Spanish Home

Over the last two to three weeks Europe has been going through a torrid time which has seen many ups and downs with many educated people asking the question, is this the end of the euro as we know it or is there a need for major reforms to it? For example, the recent range of the Pound and Euro over these uncertain weeks had been just over 1.13 to levels just over 1.17.

This of course was due in part to the recent Greek situation which had some people running for the hills as Mr George Papandreou shocked European Leaders by calling for a referendum just after being told an agreement was made to increase the bail-out package and banks agreeing to a 50% “Haircut” on their Greek holdings. 

That led the leaders of Germany and France, as well as the IMF, to declare that Athens would not now receive its next tranche of emergency aid until the referendum had passed. Moreover, the question of Greece leaving the euro was raised for the first time by angry eurozone leaders. That forced Mr Papandreou to back down over the referendum, as some might say, what was he thinking?

Italy then came into the spotlight. Italy, Europes third largest economy is also struggling as their cost of borrowing had risen again to the 7% danger level, which had put the new PM Mario Monti under pressure as he tried to form a government. The Italian bond yield had reached 7.039%, indicating continuing market nervousness about the country's debts.

Euro calculatorNew premier Mario Monti had presented his government for a vote of confidence on his third day in the job. Against that background it is hardly surprising that investors were finding it difficult to muster confidence in Greece and Italy, or that they have doubts about the whole euro shooting match.

From our German colleagues we saw figures showing their third quarter gross domestic product (GDP) reinforce the perception of a yawning gap between Germany and its weaker eurozone brethren. GDP growth in Germany for Q3 was a provisional 0.5%, similar to that of Britain. In Portugal it fell by -0.4% whilst in Spain there was zero growth. For Euroland as a whole the figure was just 0.2%.

As for UK inflation it slowed by more than expected in October, with the consumer price index (CPI) down from 5.2% to 5.0%. However, with the old link between inflation and interest rates severed, the news had no lasting impact on the pound.

In the same week as Bank of England governor Mervyn King was delivering his latest quarterly inflation report, UK unemployment total rose by 129,000 in the three months to September to 2.62 million, with youth unemployment above one million. The unemployment total was the largest since 1994, and the unemployment rate rose to 8.3%, the highest since 1996. Mr King said during his speech that the UK's economic problems were shared by other countries and that the eurozone debt crisis was the "single biggest risk" to the UK.

The Bank had cut its 2011 and 2012 growth predictions to about 1%.

Written by: Moneycorp

About the author:

For more information about how Moneycorp can save you money when sending money abroad, please visit the dedicated Eye on Spain/ Moneycorp website.

Right arrow icon Send to friends   Right arrow icon Printer friendly version    Right arrow icon Submit your own article


Don Lochnagar said:
08 December 2011 @ 02:14

For a currency in trouble, there doesn't seem to be much wrong with it, or maybe it's the pound. I took out a 'rent to buy' contract in April and in that time it's hovered between 1.12-1.16, if you actually want to buy some. I'm waiting to complete, so believe me, I'm watching it like a hawk. It should be about 1.30 at this stage!

Only registered users can comment on this article. Please Sign In or Register now.

Comment Using Facebook:

Related articles in this category

20 Home Staging Tips With a Difference

A Week in Spain

Achieving a Comfortable Temperature in Your Spanish Home

Are The Banks Paying Their Community Fees, IBI, Etc?

Bank Guarantee For Renting Your Property

Big Spanish Property Price Drop – Real Case Study

Bills, Bills, Bills

Can't Afford Your Mortgage In Spain? These Are Your Options

Can't Sell? Rent It Out With Option To Buy

Community Commotion

Coping with the limited space of an apartment

Counting The Costa Locking Yourself Out

Currency Update - Eurozone Jitters

Currency Update - Eurozone Jitters Continue Following Spanish Bailout

Currency Update - Is Spain in Trouble?

Currency Update - Sovereign Debt and the Euro's continued fall

Currency Update - What Is Happening To Europe?

Currency Update April 2011

Currency Update August 2011

Currency Update March 2011

Currency Update: Euroland and US - Where are we at the moment.

Demolitions in Spain

Do I Need To Pay Capital Gains Tax In Spain?

E.T Phone Home....but Maybe not from Spain

Entering a Community and the Role of the President

Euro Currency Update July 2011

Euro Currency Update: October 2011

Euro vs Sterling Currency Market Update

Expats Hit Hard By Property Tax Probe

Furnishing Your Property in Spain

Furnishing Your Spanish Property For Holidays Or Rentals

Getting Your Pool Ready for Summer

Home Insurance in Spain

Horizontal Property Act - Part 1

Horizontal Property Act - Part 2

Horizontal Property Act - Part 3

Horizontal Property Act - Part 4

Horizontal Property Act - Part 5

Horizontal Property Act - Part 6

Horizontal Property Act - Part 7

How Do You Value A Property In Spain?

June Currency Review of Euro Vs Sterling - Things Are Looking Up

Long Term Rentals in Spain

Maximising The Value Of Your Property

Mortgage Arrears – Is "Handing Back The Keys" A Solution?

NIE Numbers And Why They Are Important

Protect Your Home in Spain From Insurance Claims This Winter

Ratable Values Are Being Revised In Marbella

Recovering Community Fee Debts From Overseas Owners

Security Is The Key For Your Home In Spain

Some Spanish Property Market Good News?

Spain Ends Monopoly Of Electricity Supplies – Could Your Community Make Savings?

Spanish Property Market Values - What Is The Truth?

Sterling - Euro Reaches New Highs

Swimming Pool Regulations

Target the Spanish

The Day the Don Juan Community Defeated Don Juan

The Impractical Side Of Spanish Architects

The Nota Simple Explained

The Pound And Euro Face Uncertain Times

The Spanish Property Crisis - How long will it last?

The Stirling Euro Yo Yo Effect

There's Something About Spain

Tips On Selling Your Spanish Property The Distressed Way

Top Sales Tips: Get The Best Out Of Your Estate Agent

Top Tips For Insuring Unoccupied Holiday Homes In Spain

TRG for Sellers

Update On The Euro From Moneycorp

Valenica Land Law Abuses Fight For Justice Continues

Weekly Euro Update - 18 May 2010

Weekly GBP Euro Update - 20 July 2010

What is a comunidad de propietarios?

What The Future Holds For The Spanish Property Market

What to Do If Unable to Pay Off a Mortgage to a Bank in Spain?

What's Happening With Aifos?

Where Is The Eurozone Economy Heading?

Why Do So Many Still Put Spain Down?

Why Is My Spanish Property Not Selling?

Why to Insure Your Spanish Home in UK

Wills in Spain - No Will....No Way

Your Property on the Web - Simple!

Click here for a list of all the articles from our magazine 

Spain insurance services

This site uses cookies. By continuing to browse you are agreeing to our use of cookies. More information here. x