Bad Weather forecast for the whole Euro area

Greece would still be on the brink of collapse, Italy would no longer control its public accounts and its banking system, the United States would seek to terminate the euro, the United Kingdom would seek a hard Brexit and major elections will take place soon in France, the Netherlands and Germany. This list, written down by Maurizio Giuliani, a financial advisor based in Torino (Italy), confirmed the extent to which political risk should affect the year 2017’s developments.

Several factors do contribute to the concern of a growing number of financial advisors who, like Giuliani, advised the utmost caution as to where, when and how to invest this year. First, on February 20, 2017, the Eurogroup may not deliver the next tranche of funding to Greece, thereby increasing the risk of default.

Then, the euro (EUR) weakened not only against the US dollar (USD) but also against the Swiss franc (CHF), in parallel with a renewed interest in gold. This would be indicative of increasing instability. Also, Italy’s situation would be particularly critical. As for the euro and the possible Grexit, Frexit, Gerxit, Giuliani cited the Financial Times (FT) according to which leaving the euro area would be possible, depending on what would be “haircut”.