Bringing you live news and features since 2006 

Wealth manager believes implications of Greek crisis have been wildly exaggerated


Commenting on the Greek bailout saga, Stuart Mitchell of S. W. Mitchell Capital and fund manager of the St. James’s Place Continental European, and joint manager of Greater European and Greater European Progressive says: “We have always felt that the possible implications of the Greek crisis have been wildly exaggerated by most commentators.”

“At the end of the day, what most people forget is that the overwhelming majority of Greeks want to stay within the Eurozone, therefore a deal was always going to be struck. Prime Minister Tsipras was only empowered to get the best possible compromise that he could. We now have a ‘technical agreement’ between the Greek government, IMF, ECB and ESM [European Stability Mechanism], and it’s not a bad deal for the Greeks: a EUR85 billion package which requires only a 3.5 per cent primary surplus by 2018, no new austerity measures, raising the pension age to 67 by 2022 and deregulation of the gas market by 2018.
The country agreed terms to receive up to EUR85 billion (GBP61 billion) in loans over the next three years, in return for tax rises and spending cuts. The initial tranche will be EUR26 billion, including an immediate EUR10 billion to recapitalise Greek banks. However, the International Monetary Fund warned that the debt was unsustainable, calling on Eurozone ministers to offer debt relief to the Greeks – a consideration that is highly likely to be discussed by ministers in the autumn.
“The Greek debt package is just one small part in the ongoing move towards economic normalisation across the Eurozone. Most commentators have struggled to accept how deeply companies and governments have restructured elsewhere at the periphery of Europe. Just look, for example, at the 40 per cent reduction in costs that the airline IAG achieved [in its Iberia brand]. At the same time, German wage growth is beginning to accelerate quite quickly. The recent 3.4 per cent pay award struck by employers and the highly influential IG Metall trade union is the highest since 2007. In fact, a significant proportion of peripheral Europe’s productivity gap with Germany has now been eliminated over the past few years. Closer to the core, furthermore, Matteo Renzi and François Hollande are beginning to make real progress with reform. We will look back at this time as the moment when Europe made the necessary adjustments to secure the future of the currency.”

Latest News

US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Lorraine Sereyjol-Garros, BNP Paribas
Following changes to the French Monetary and Financial Code and of the French market authority AMF’s General Regulation, it is...
Ed Rosenberg, Texas Capital
Texas Capital Bank first opened its doors back in December 1998 and nowadays offers wealth-management services, as well as commercial,...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by