It has been very difficult to avoid the media coverage relating to the Greek conundrum and will she or won’t she repay her creditors. A lot of money has been dished out to Greece via loans that the country is struggling to meet repayments on. We all know that when repayments can’t be met default on the loan is often just around the corner.
There has been a lot of talk about the consequences of a Greek default and a subsequent exit from the Euro but what is the impact on all of this for the average person in UK. You’ve heard all about the falls in global stock markets and the potential impact that this may have on pension investments. This threat is very real, but for those who are not close to pension age the need for concern is far less. Haven’t we been here before during the credit crunch and the resulting global financial crises.
There is likely to be an impact on the value of the Pound and it’s often difficult to judge the full impact until after the event. Let’s take the fundamentals as a starting point; the British Pound is seen to be a safe haven alternative for investors selling and ditching the Euro. This suggests that the pound could well strengthen against other currencies such as the Euro. This means that your next holiday could infact cost you less.
The exit of Greece from the Eurozone could also lead to a leaner and more effective Eurozone economy. At the moment Greece could be seen as a lag on the Eurozone and a hindrance on growth. After the exit the Eurozone will be free from future burdens associated with Greece.
This is certainly a complex scenario and we’re not claiming to have addressed all of the issues but rather to start the debate on what this all means for the average person.