Decisions have yet to be reached by either Spain or Greece regarding key issues which could make or break the struggling nations. If this wasn’t bad enough, the leaders of the Euro-Zone’s most prominent, powerful and well funded economies are pulling apart at a time when the whole currency bloc should be pulling together.
Discord between Germany and France was highlighted this week as German Chancellor Angela Merkel and French President Francois Hollande clashed over the weekend. The current Franco-German disagreement stems from diverging opinions regarding the timetable attached to overhauling the region’s banking sector.
A chef economist with Morgan Stanley commented that ‘Complacency seems to have affected European policy makers.’ Joachim Fels went on to state: ‘One case in point is the disagreement between governments about the nuts and bolts of a banking union, which remains crucial to break the negative feedback loop between banks and weak sovereigns.’
Hollande has stressed that tackling the current issues plaguing European banks and revamping banking supervision should happen as soon as possible, urging ‘the earlier, the better.’
Merkel appears to have adopted an alternative stance and intimated that cautiously developing a more encompassing method of banking supervision could take a significant amount of time. After acknowledging that financial markets would be expecting results Merkel stated that the overhaul ‘has to be thorough, the quality has to be good and then we’ll see how long it takes.’ Germany also continued to appear reluctant about passing control of Euro-Zone banks to the European Central Bank.
The dissention is halting gains made by the Euro and European stocks following confirmation of the ECB’s bailout plans. Investors are hoping that resolution between the diverging nations is not too long in coming as delaying the placement of such an integral building block could render attempts at bolstering the 17-nation Euro-Zone obsolete.
The Pound to Euro exchange rate is currently trading at 1.2560
The Pound to US Dollar exchange rate is currently trading at 1.6215
The Pound to Australian Dollar exchange rate is currently trading at 1.5591
The Euro to US Dollar exchange rate is currently trading at 1.2908
The Euro to Pound exchange rate is currently trading at 0.7962
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