The European Union member states are continuing to bear the brunt of the debt which Greece accrued, this time resulting in extreme volatility within the EURUSD pair as Germany rejects the extension proposal for repayments of Greece’s liability.
Greece’s election of the recently was a clear demonstration of the voting public’s viewpoint in terms of repayment of the 190 billion euros of toxic debt that Greece is mired in, following the European Union having lent the nation the money to bail it out, securing the debt on the very Greek banks which were financially unstable.
Equating to a third of the European Central Bank’s capitalization, the Greek debt poses a severe threat to the future of the European economy.
Last month’s quantitative easing measures, sanctioned by European Central Bank President Mario Draghi, which involve buying 60 billion euros worth of assets each month until late 2016 serve to highlight further the gravity of the situation, bearing in mind the indebted nations which make up the Eurozone, the southernmost of which have 57% youth unemployment, and the northernmost which are rapidly deindustrializing and carry domestic debt of their own.
The EURUSD has tumbled by a full cent since 9.00am today, following the rejection by Germany of Greece’s proposal to extend its repayment period.
The Syriza party, upon election, made its stance clear that it has little intention of implementing measures toward repayment of Greece’s liability, creating suggestions that the nation may leave the European Union as discussed by LeapRate prior to the quantitative easing measures, with the debts having to be eventually written off.
Chart courtesy of FXStreet