The climate in the international markets is not the best. The uncertainty has returned, there is more than enough suspicion about the progress of large economies and the geopolitical dangers are exacerbating the sense of instability in the credit markets.
In the past few days the American markets expressed their anxiety over the financial developments in Europe and they are particularly troubled by the French weakness, the Italian depression and the German retreat.
Most estimate that the financial crisis is returning to the Old Continent, the recession is looming, while the combination of international threats and Ebola may affect international trade and by extension global finances. It is no small feat that the price of oil and other raw materials had dropped as a result of this outlook.
In this troubled international environment the Greek government was inspired to begin discussions of an early exit from the bailout program and to rid itself of the troika, particularly the International Monetary Foundation.
This resulted, almost automatically, in the generation of doubts. The perspective of an early departure of the Greek economy’s monitors highlighted the lack of trust that hounds our country, which resulted in the sudden increase of the Greek bond spreads and the dramatic increase of interest rates.
With a 7% interest rate for Greek bonds the markets have essentially closed their doors to Greece.
If the climate of uncertainty persists it is likely to further increase, which will cast doubts over the exit plan from financial supervision and the subsequent plan to return to the markets.
As we all know, the government based its ambition on this exit plan in order to elect a new President and avoid early elections.
Clearly Mr. Samaras was expecting different circumstances in the international markets. Now the danger is that the markets will cancel his political plan and fall victim to his ambitions.
That is the worst case scenario, not just for him, but for the entire country.
If that is the way things are and if they develop accordingly there it is absolutely necessary for revisions to take place on time.
Otherwise an accident – political this time – is waiting to happen which may put everything at risk.
Antonis Karakousis
