Member Article

Expert’s warning over Greece

THE full extent of the Greece debt crisis is yet to unfold with the risk of contagion to other weak euro economies, a City expert has warned, as pressure rises on Germany to provide financial support to Greece.

Phil McHugh, senior executive dealer at leading foreign exchange firm Currencies Direct, said: “It is no surprise that the Greek debt debacle has weakened the euro, what is striking is that it hasn’t weakened the currency further.

“Clearly in the current circumstances there is concern for investors in maintaining their holdings in the euro. This is not the fault of the single currency itself, but is a result of Greece having reached the crunch point as it calls on funds on which the EU is delaying delivery.

“There is no quick solution for Greece’s problems; the country’s deficit has increased, its GDP has slumped and funding costs have increased sharply. This hasn’t been helped by the recent downgrade of Greece’s debt to junk status.

“The contagion is now spreading to other fragile EU economies such as Portugal, their debt was also downgraded two notches by Standard & Poor’s - the pressure is intensifying on the euro.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .