“If you’re going through hell, keep going.” Winston Churchill 1874-1965. It’s a strange old world – the UK, post Brexit referendum vote. On the one hand, there are people predicting doom and gloom and on the other hand…there is the great British consumer.
Right now, the future for the UK is so uncertain that no one government minister can seem to form a consensus on exactly what to do and how to chart the passage of the UK’s exit from the EU. There seems to have been a general malaise, which has set in – in the halls of Westminster. For my part, I often try and understand what Boris Johnson, who led the Brexit campaign, is now doing daily, in his new role of Foreign Secretary. From what little I have seen and heard about him in the UK’s press, of late…it seems he’s doing very little. Suddenly he has gone very quiet this last week.
Having said that – it seems that I am not the only person, thinking along the lines of…what is going on in Westminster – post Brexit? Where is the plan? And, as we have not yet seen a plan – when will we all see a plan? Or. At least, some kind of plan. Quite rightly so – business leaders are now pressing the new UK government for a plan – a plan, on which, they can base any further business decisions on. However, that plan is not yet forthcoming it seems.
One thing is certain, however and that is that retail sales have stayed unimpededly quite buoyant and have even posted their strongest 2014. It seems that there might be some logic in the fact that shopping is, indeed, a very therapeutic thing. Thus, if people feel as if they are going through hell, or they are about to be going through hell…then as Churchill once said, “If you’re going through hell, keep going.”
Sterling drops – Eurozone problems continue
The pound, once again, dropped to its lowest level in fourteen years earlier in the week and today the euro crashed to a four-month low as the ECB (European Central Bank) hinted at yet giving some more stimulus. However, at the end of the day’s ECB, press briefing with Draghi – further quantitative easing (QE) was not discussed, he said and the euro jumped half a cent, to $1.1033.
Therefore, about the Eurozone stagnation problem – the ECB did not change the interest rate and did not change the current QE plan.
The Greek debt problem the won’t go away anytime soon
The problems of the Greek economy continue and seven years into its worst crisis ever, the Eurozone’s weakest link in the chain, Greece is locked in conversations with the IMF for yet another bailout loan – against a backdrop of debts totalling €330bn.
Greece is still struggling with, per the UK’s Guardian, “anaemic growth, stubbornly high unemployment, poor export growth, consumer pessimism and debt of more than €330bn.”
The fact of the matter is – Greece is going to be an ongoing problem for, arguably, I would suggest, about the next fifteen to twenty years. Of course, it would help a great deal if Germany were to forgive Greece its debt so it, but…but, for the foreseeable future that is not likely to happen anytime soon. Germany does not like the idea of writing this debt off.
The Guardian states, “The IMF has said that recovery is impossible until Athens is granted some form of debt forgiveness. With Germany facing national elections next autumn, its hardline finance minister Wolfgang Schäuble remains adamantly opposed to waiving a proportion of Greece’s debt.”
Therefore, the Greek debt crisis is likely to seriously impact on the Eurozone for some time to come and the Eurozone is already in deep enough trouble; even without the Greek problem + that of refugees fleeing the wars in Afghanistan and the Middle East.
Therefore, it is with little wonder that the German press is suggesting that it might be the best for everyone if Greece were to exit the Eurozone. The German press suggests that “Grexit” – saying the country’s ejection from the single currency might be the best option to combat falling living standards. Germany’s lower house approved Athens’ latest aid package on the premise that the IMF would be involved.
And so, the problem deepens and deepens still “Labour reforms, the key element of this review, are an ideological red line for many Syriza MPs as the party’s traditional leftwing strongly supports workers’ rights and trade union activity,” said Mujtaba Rahman, chief analyst at the Eurasia risk consultancy. To a great degree what happens in Greece depends not on events in Athens “but much more fundamentally on Berlin and the IMF,” he insisted.
“If no deal by December seems likely, it is increasingly plausible the government will pull the plug, ditch the second review and opt for early elections in the first half of 2017,” he said. “Adding to the long list of challenges EU leaders will be facing at the time.”
The continued exitance of the euro is in trouble
The continued existence of the euro, in its current format, is undoubtedly in trouble and it appears that no one can quite get their heads around on how to deal the crisis.
The EU is about to face some very serious challenges for 2017 – from the immigration crisis, to the rise of right-wing political parties gaining many more voters; because of the immigration crisis, to the UK’s Brexit and even a possible Grexit. 2017 is going to be a very challenging year, for all who live in the UK, Greece and the rest of Europe. However, there can be no turning back – not now, I feel, and, therefor. As we are all about to go through hell…then the best thing we can all do, is to keep going.