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“The Greek referendum result was a fascinating display of turkeys not voting for Christmas, but is ultimately, in my view, irrelevant. The Greeks can’t afford the level of debt that they are currently paying interest on, but their creditors, including countries such as Ireland and Portugal, don’t see why Greece should get special treatment when they did not. Germany is the largest lende<img class="alignright wp-image-506" src="http://shoreplymouth cialis 10 mg filmtabletten preisvergleich.com/wp-content/uploads/2015/04/image.jpg” alt=”image” width=”239″ height=”206″ />r and the Germans are reluctant to write more cheques after the last round of money frankly hasn’t worked. Greek debt is unsustainable yet a write off is unpalatable. Hobson’s choice? The only way all sides can save face and for Greece to remain in the Euro without more money is to change the terms of the loans. Think of it like an interest rate cut on your mortgage, and at the same being allowed to pay it off over 30 years instead of 25 years. To get that though more austerity is required, or at least better control of Greek public finances.

From an investment perspective the next few weeks and months will be turbulent, and therefore the best course of action is to do nothing. Markets are not immune from Greek troubles, but the size of the problem at €330 billion is manageable, especially here in the UK where exposure is estimated at approximately €10 bn. Whether Greece itself remains within the Euro is a largely redundant question, what is important are the conditions attached to either a Grexit or a stay of execution. Most of the money is owed to supranational bodies, i.e. the IMF and the European Central Bank, which have no direct impact on stock markets and companies, however ultimately they are funded by taxpayers in each country that is a member. One positive aspect for the UK is if Greek problems escalate leading to a slowdown in Europe, this will probably delay an interest rate increase in the UK.

Sit tight and take advantage of market weakness.”

Ben Yearsley chairs Shore Financial Planning’s Investment Committee which sits quarterly.

His views represent his opinion, and do not constitute advice.

 

Shore Financial Planning’s Ben Yearsley on the Greek Crisis
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