As you can see from the graph, the nation of Greece, once the subject of almost daily speculation about the viability of its government bonds, has pulled its economy out of a disaster into a muddle. No doubt, you got tired of hearing about Grexit scenarios and all the times when the European Central Bank and the European Stability Mechanism came to the rescue.
Today, Greek unemployment stands at an alarming 23%, yet somehow the country has eked out a budget surplus, counting debt-interest costs, of 0.5% of GDP in 2016. So the country is finally out of the woods, right? Alas, Dutch and German creditors are now demanding that the Greek budget surplus be raised up to 3.5%, a level which would certainly push the nation into depression. Meanwhile, French, Dutch and German officials are afraid that if they permit the ESM to refinance Greece bonds at lower interest rates, it would embolden anti-EU politicians and potentially break up the union.
The resulting standoff, once again, threatens a Greek default and the possibility of a Grexit. Expect to read all about it in the coming months, and experience deja vu all over again.
Empyrion Wealth Management (“Empyrion”) is an investment advisor registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940. Information pertaining to Empyrion’s advisory operations, services and fees is set forth in Empyrion’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Empyrion. The information contained in any third-party resource cited herein is not owned or controlled by Empyrion, and Empyrion does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Empyrion of the third party or any of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner or investment advisor.