In its recent update, the International Monetary Fund’s economic growth projections for the Eurozone, including Lithuania, are unchanged at 1.5% for 2015.
In the coming week, Greece is due to present its next set of austerity measures, which it must implement in order to secure new financing.
The euro slid 0.65% to end at $1.0876 on Thursday, July 16. The European Central Bank (or ECB) maintained its zero lower bound interest rate at 0.05%.
Consumer spending, which is a key driver of the inflation rate, needs to pick up in the Eurozone.
For July 2015, the downward trend in the ZEW Indicator of Economic Sentiment continued for Germany as well as the Eurozone.
According to a Eurostat report released on Tuesday, July 14, industrial production in the Eurozone declined by 0.4% in May.
On July 13, the Greek saga hit another milestone. Eurozone ministers reached a unanimous agreement to bail Greece out again.
Greece’s exit from the Eurozone (or “Grexit”), if it does happen, could have serious consequences.
Greece’s creditors need to recognize that the massive Greek debt is largely untenable. Greek debt still stands close to 175% of its GDP, which is unsustainable by any standard.
The fallout from a Grexit could rise to mythic proportions, especially if it occurs simultaneously with the collapse of the Chinese bull market.
Greece is opposed to the austerity and reform agenda. In the past, austerity measures helped reduce Greece’s fiscal deficit, but reduction came at a heavy price: crippling social and economic impacts.
Crisis has embroiled Greece for more than half a decade. The once prosperous economy has been reduced to shambles and is teetering on the verge of bankruptcy. How did Greece get here?
Eurozone ministers gave Greece until yesterday to come up with a concrete bailout proposal. Greece submitted its plan two hours before Thursday’s midnight deadline. The plan will be discussed in an emergency Eurozone summit on Sunday.
Industrial production in Germany didn’t record any growth in May over April, according to a Deutsche Bundesbank report dated July 7.
Greece just recorded its 28th month of deflation. American companies such as Pfizer (PFE), PepsiCo (PEP), and Xerox (XRX) operate and provide employment in Greece.
The Greek debt crisis has raised fears of Grexit and is lending to increased volatility in the European (VGK) (FEZ) (HEDJ) as well as global (ACWI) financial markets.
Factory orders in Germany declined by 0.2% in May, according to a Deutsche Bundesbank report dated July 6.
The Eurozone’s Retail PMI (purchasing managers’ index) dipped to 50.4 in June from the 51.4 recorded in May.
On June 19, Russia and Greece signed a preliminary agreement for “cooperation on a pipeline that will bring Russian gas to Europe through Greece and Turkey.”
Greece’s debt-to GDP ratio stands at 177%. Currently, that’s what Greece (GREK) needs to unburden. It’s what caused the crisis.