Is it out of Crisis EURO at One Month High: For the last three years, the Eurozone has been struggling with heavy financial crisis, but the impressive and dramatic movement of the Euro in the market sent whispers that the crisis may soon come to an end. But will it the escalating decline of the EURO comes to a close in the year 2013 or will the curse continues in the EUROZONE.
In comparison to the performance of the region last year, the end of 2012 has been more favorable to both business and economics. Although some regions are still having difficulty resolving unemployment and debt concerns, it seems most of the countries have found ways to recover from the dark days of November 2011; but is this enough?
The Influential Statement of Mario Draghi
A leader is tested during tough times. Will he crumble? Will he remain strong? These are the questions lingering in the minds of many financial analysts before Mario Draghi boldly stood at the forefront of the crisis and declared that they will do whatever it takes to save the Eurozone. The shout of confidence from Draghi made a huge impact to investors and this helped reduce the threat against the single currency of Europe. Moreover, eyes were slightly re-focused as the US Elections were held in the last quarter, giving more time for the EURO to slightly recover from the plunge it is set to experience.
Eurozone: Moving Forward
The result of Draghi’s speech motivated other European nations to act quickly. Here are some of the significant positive effects it has triggered:
- Spain responded well and the world is now seeing its foreign capital trickling back to its original graph. The 10-year bonds entered by Spanish now falls below 5.4% which is lower than the 7.6% result on July 24, which is more attractive to investors wishing to find more lucrative investments.
- Italy responded by selling 10 year bonds and this is now helping its economy stand on its feet once again. The bond rates may be lower than what Italy would wish to maintain, but it becomes one of the few options left for these countries if they wish to survive the crisis that has stricken the Eurozone.
The bond rates offered by both Italy and Spain are incredibly low, and this is enough for some investors go and proceed with their decision to support these countries. However, it will take more than a bold speech to move some investors in taking risks and giving the benefit of the doubt of the financially impaired members of the European Union because there are still some investors who would rather put their investments in safe haven like Germany, Singapore, and China.
The Implication of these Actions
It may still take quite some time because investors are fully convinced that the Eurozone Crisis is indeed over. Greece is still the weakest member of the EU and worsening economic conditions are anticipated to increase in this region. The mixed decisions of investors are clear evidence of this matter. Nevertheless, the move of Draghi to step up and reduce the panic experience in the region is strongly applauded.
Major Factors to Consider by the Eurozone
Dr. Nicholas Spiro shares some of his views concerning the critical elements that will ultimately solve or crash the Eurozone crisis.
- Shoring up Spain
- Establishing a banking union
- Keeping Greece in the Eurozone
- Agreeing to proceed with a new seven-year European Union budget
It is good news to see bond rates of Italy and Spain improving, but this is not the only factor that will determine if the Eurozone is to be considered part of history. Much is still needed to be observed. Until then, businesspersons should carefully watch the trends in the global market to find the best forms of investments today.
When will the EUROZONE crisis end? Analysts see that it will see better recover during the second half or a latter quarter of 2013. This is their prediction. How about you, do you see the same?