Although the second bailout of Greece may have calmed markets in the short-term, the recent volatility in Italian and Spanish bond markets signalled the beginning of a new and critical phase.
Europe’s policymakers had always hoped that by bailing out Greece, Ireland and Portugal, the crisis could be restricted to these relatively small economies. This strategy has clearly failed and the measures taken at the recent summit recognise this fact. Slow progress The future shape of the eurozone will likely be determined by how events unfold in Italy and Spain. Investors are generally making the assumption that what happens today in Greece in terms of bailouts and haircuts on bonds could happen tomorrow in Italy or Spain. Both countries are making efforts to reduce their ...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
