Both Angela Merkel and Mario Monti are holding crisis talks at the moment as Spain continues to suffer financially and the worry that Greece will not be able to keep up with its austerity measures to keep it within the Euro zone. Spain has recently announced that its economy has shrunk by 1.3% in the second quarter and one of its largest economic areas Catalonia has asked for €5bn from Madrid. However, on a positive note for the Euro zone Mario Monti has announced that Italy does not, at least for now, need a bailout. Italian bond auctions have seen costs falling, which is good news for Italy.
The next key summit is due to take place on October 18th as well as many other meetings due over the next few weeks. The main aim of the next summit is to decide what to do with Spain. Catalonia accounts to a fifth of Spanish economic output and so the recent news that it is struggling is bad news for the country. With the high borrowing costs set to continue even after their €100bn bailout in June it is likely that they will need further bailout during the year is out. This could provide some very good buying opportunities for those needing to buy Euros.
With Sterling Euro exchange rates dropping last week from 1.28 into the 1.25 region we have seen a mild increase early this week to levels approaching 1.26. If you do have a currency requirement and would like to ask me any questions please feel free to do so by sending me an email Tom Holian firstname.lastname@example.org