The euro plummeted against the background of the termination of negotiations between Greece and its main creditors. Investors fear a possible default by Greece and the fact that it may become the first country to quit the eurozone. Meanwhile, in Greece announced extra bank holiday and a limit on cash withdrawals at ATMs.
The refusal of the Greek government to accept the demands of credit institutions topple it uniform rate European currency. June 29, the euro fell nearly 2% against the dollar and was trading at $ 1.0955. This is the lowest level since June 2. The euro fell and against the Japanese yen: its rate rose to 2.7%, to 134.73 per euro. The lowest rate of the euro against the ruble on June 29 was registered at 10.50 MSK, when one euro on the stock exchange gave 61.3 rubles.
All last week, Greece together with its creditors – the International Monetary Fund (IMF), European Central Bank (ECB) and the European Commission – have tried to reach an agreement to resolve the situation. Athens submitted several proposals for its part, to reform the financial system, in exchange for Athens expected easing and postponement of payments on loans. But lenders are offering their conditions, which did not suit Greece.
The stumbling block was the Greek pension system – the creditors demanded more radical changes, which the center-left ruling party of Greece “Syriza” refused to go.
German Chancellor Angela Merkel demanded that Greece take “extraordinary generous offer”, but the Greek Prime Minister Alexis Tsipras rejected him, accusing the EU of blackmailing the negotiations.
On Saturday night Tsipras announced the decision to hold a national referendum on July 5. Greek citizens will be asked to express their attitude to the plan for the settlement of arrears prepared by the creditors. Tsipras said that he would ask for an extension of the program of assistance to the date of the national referendum to be held on July 5.
Greek debt amounts to around € 340 billion. Tomorrow, June 30, the deadline for the next payment on the loan from the IMF. Athens should be transferred to the IMF € 1,55 Bln. Otherwise, the country faces default and possible exit from the euro zone.
After a sharp conclusion of negotiations last week, the head of the IMF Christine Lagarde said that the delay in the payment of the next tranche loan to Athens will not receive.
nagryanuvshaya frightened by the financial crisis the population of Greece in the last week withdrew from the deposits of national banks billions euro. On some days last week, amid reports of joyless Greek authorities during the negotiations with the European creditors, the amount withdrawn from cash deposits reached a billion euros a day.
In an attempt to stop the switched out of Greek banks’ capital, the government announced Monday a day off in banks and restricted cash withdrawals at ATMs up to € 60.
Prohibited and cash transfers abroad, except for vital occasions. And travel agencies UK and Germany have advised tourists departing on holiday in Greece, stock a sufficient amount of currency because of possible problems with withdrawals from ATMs of the country.
Against this background, the European Central Bank decided not to terminate the program of assistance to the Greek financial and credit organizations, fearing that such a move will lead to a complete destabilization of the financial situation in the country. At the same time, the leadership of the ECB noted that does not exclude that in the future a decision – refusal to issue emergency loans to Greek banks – can be accepted.
The European markets opened on Monday a significant drop in major indexes. So, as of 11.35 MSK German DAX fell 3.27%, the French CAC 40 – 3.42% and the British FTSE 100 – by 1.6%. Against the background of falling European indexes Eurobond yields of Greece increased by 369 points, to 14.54%.
On the alarming reports from Europe and Asian markets have reacted – in Chinese stocks trading platforms fell by 7%. Over the past two weeks the fall of the Chinese market reached 25%, writes Reuters.
The current year can not be considered successful for the European currency. Because of the rising of the Greek crisis, the euro reached a 12-year low in March. Then for one euro on the stock exchanges gave $ 1.0458.
In the first six months of this year, the weakening of the European currency against the US was 9%. In the past 2014 the euro fell against the dollar by 12%.
By the end of 2015, the euro could come to parity with the dollar, according to the analytical study of Deutsche Bank, published in April. To maintain the rate the European Central Bank monthly pours into the financial system of the euro area about € 60 billion, writes Bloomberg.
«Asian markets move downward because of the risks in response to what is happening in Europe, in Greece”, – she told Reuters the head of the department of the client in the investment firm Saxo Capital Markets Christopher Moltke years. According to him, investors withdraw capital from riskier to safer assets, fearing that Greece could become the first country to declare a default and exit from the European monetary unit.
«We have entered a zone of uncertainty, and European equities, as well as all other markets, have encountered difficulties,” – he said the managing director of Deutsche Bank Nick Lawson, reports Reuters.
According to him, the lack of liquidity, influenced the sovereign and corporate debt markets, only aggravates the situation.
«This is a risk for all – said an analyst at Bloomberg Australian investment IG Ltd Stan Shamu.- all nervous on the eve of the referendum. But traders do not want to support the euro, and perhaps in the near future financial losses will increase. ”
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