Europe on a tightrope

The BlackRock Investment Institute has included a list of key dates of elections and meetings of institutions such as the EU and EC in its latest research into the crisis currently enveloping Europe.

Like many others, BlackRock’s view is that politics sit centre stage in terms of any solution to the short and long term challenges facing the region.

“Politics will drive the outcome: If the US finds it tough to reach fiscal accord, consider the challenges of the 17 eurozone nations,” its research note says.

“The political and market turmoil is likely to intensify in the run-up to the Greek elections on June 17. The election of an anti-austerity government could trigger a Greek default. This does not necessarily mean Greece would leave the eurozone, but it could spark bank runs that could potentially spread to Portugal, Spain and Italy.”

“Europe’s defenses against this and other “contagion” risks are inadequate with rescue funds still in gestation and no central decision making, we believe. The European Central Bank (ECB) has enough firepower to end any crisis immediately – but is loath to do so for fear of going beyond its inflation-fighting brief and giving a free ride to countries that do not even attempt to balance their books.”

To view the full research click here: [asset_library_tag 5385,Europe on a tightrope]

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