Despite the G8 meeting of leaders from some of the world’s biggest developed economies indicating that many world leaders are turning from austerity towards growth, international focus is likely to remain on austerity in Greece whoever gets elected.
“I don’t think the Greek public should expect much softening from Germany or the troika [international lenders to Greece made up of the International Monetary Fund, the European Union and the European Central Bank],” Fordham warned.
'Grexit' Before Election?
Greece could exit the euro even before June 17th’s election, following substantial capital flight from the country as wealthy Greeks take their money out of the country, according to Brendan Brown, author of Euro Crash and head of research at Mitsubishi UFJ Securities International.
The question of a Eurobond – a common, euro-denominated bond issued by all the countries in the euro zone - has arisen again this week after newly-elected French President Francois Hollande pledged to make it a key discussion point at Wednesday’s euro zone summit.
Many believe that the creation of bonds issued by the euro zone would help back up struggling countries like Greece – but some of the more secure countries could resent the extra burden. German Chancellor Angela Merkel is one key opponent of the proposal, ahead of elections in her own country later this year.
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