BNE welcomes deal to restore confidence in the euro
BNE welcomes yesterday’s agreement in Brussels for a second rescue plan for Greek economy in order to restore confidence and stability to the single currency. The agreement will provide for a further €159 rescue deal for the Greek economy while also putting into place measures to avoid further contagion. Yesterday saw the founding of concrete economic governance on the European level.
BNE believes that the prospect of a meltdown of the euro would have catastrophic consequences not only for Europe but for the whole of the global economy. The euro’s success is therefore essential to the economic recovery and growth of the United Kingdom. As stated by the Business Secretary, Vince Cable yesterday, “[The euro zone crisis] is a danger to the UK because half of our exports are to the EU countries. If there is a major unresolved crisis in the euro zone, it will have massive implications on our trade and even more the potential threat to financial stability through the banking system.”
Phillip Souta, BNE’s Director, said “Yesterday, we were brought to the very edge of a catastrophic break-up of the single currency. Euro zone leaders took the important decision to not only support Greece in their hour of need but to take a step closer to economic governance on the European level. The ECB has also taken the important and correct step in agreeing that private bond holder contribution is necessary.” He continues by saying “The deal struck yesterday has restored a much needed level of calm to the markets. As we take in and learn further details of the deal, it is essential that European leaders continue to act swiftly and jointly to restore full confidence.”
Despite the UK not participating in the deal, BNE believes that it is essential for the UK government to work together with their EU counterparts to support the agreement. Mr. Souta continues, “On all levels within the EU, the UK must argue for bold and innovative reforms to boost jobs, growth and productivity. It may still be necessary to take further steps towards euro bonds and greater restructuring, but this is definitely an important step in the right direction.”