In a recent interview with CNN’s Christiane Amanpour, Italian Prime Minister Mario Monti said he was feeling more confident about the eurozone’s prospects than he had been earlier in the year.
He conceded that his government’s actions had deepened the recession in Italy, but held that they had mitigated the risk that Italian fiscal issues would escalate into a crisis.
There has also been a more positive tone coming from the European Central Bank (ECB), with president Mario Draghi highlighting the “significant progress” being made, while remaining forthcoming about the risks facing the continent.
Specifically, Draghi said he believes the ECB’s announcement of a bond-purchasing program had helped give strained national governments the breathing room they need to effectively restructure their economies.
Despite progress, risks remain
The volatility of financial markets continues to pose a threat to the economic recovery. There has also been a steady stream of speculation that Greece will be forced to exit the currency union.
Jeorg Kraemer, chief economist at Commerzbank – Germany’s second largest bank – told CNN that the only reason European politicians were dragging their feet on the subject was the potential disruption it could cause.
“I don’t think Greece will be part of the eurozone in five or ten years but currently the politicians in Germany and elsewhere do not want to pull the plug,” said Kraemer.
The chief concern regarding a Greek withdrawal is that it would spark a “domino effect,” causing other troubled nations to abandon the euro, with unpredictable consequences. Companies with current or prospective investments in the eurozone may want to consult with the experts at a financial project consulting service in order to determine how they could be affected and plan for the future.
