Peripheral Europe Getting Ugly

Peripheral Europe Getting Ugly

Tonight should see the European Central Bank’s Governing Council cut its benchmark rate to a record low 0.5 per cent.

The Eurozone unemployment rate for February 2013 hit 12.1 per cent, while the youth unemployment rate (< 25 years of age) is 23.9 per cent. The unemployment rate in Spain and Greece is running at around 27 per cent, while their youth unemployment rate in both countries exceeds 55 per cent. The Eurozone annual inflation rate for April 2013 is 1.2 per cent, down from 1.7 per cent in March. Meanwhile, Slovenia looks like it is heading down the Cyprus path, now that their debt rating has been cut to junk status by Moody's. Slovenia's three largest banks are already government owned or controlled. Rising loan losses have left a hole which is estimated to account for 20 percent of the E36b economy. On 8 April 2013, I wrote "A 'run' on banks in Malta, Estonia and Slovenia, for example, seems increasingly likely as non-performing loans within their banking sector come to light". Peripheral Europe is getting ugly, and I reiterate, "a Euro held in one of the seventeen countries is not the same as a Euro held elsewhere".

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Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

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