On Monday, European markets made incredible gains as hope for a Greek deal became tangible. Below is a graph of major European Indices and how they have performed over the past month. Between yesterday and today, most of the losses have been totally reversed.
The star performer is Greece, up over 16% in two days, up 6% yesterday.
The recent decline in European stocks is due to the fact that Greece is very close to defaulting on it’s $1.8 Billion loan from the IMF. If the former happens, Greece risks being flung out of the European Union as well as the Euro currency, which could be a travesty to Greece and Europe. If that happens, the world economy might not make any significant gains this year.
- New taxes on businesses and the wealthy
- Selective increases in VAT
- Savings in pensions linked to curbing early retirement and increasing pension contributions
- No further reductions in pensions or public-sector wages – “red lines” for Greece’s Syriza government