The European Union (EU) Council Summit will be held October 18th through the 19th in Brussels.
This summit will last two days and has great potential of being a market shifter. Leaders from Europe will gather to discuss Spain, Greece and other critical European subjects. If a Spain bailout decision is finalized, I’d expect the Euro to jump significantly. Forex traders will be watching closely as these meetings shed light on the economic future of Europe.
Let’s talk about Greece…
“Europe and the IMF will likely have overcome their different estimates about how the debt sustainability will be assured” the Greek Prime Minister Antonis Samaras informed a Greek newspaper on Sunday, October 14th.
Greece has been in communication the European Union, ECB, and IMF about economic reforms and receiving a new dose of support. A possible dose of 13.5 Billion Euros, that is.
It’s currently unclear whether officials will decide to release new aid for Greece.
New ways to cut Greek’s debt also may be discussed at the summit.
Will Greece receive 13.5 Billion Euros? Will Greece eventually leave the Euro Zone? All these questions are uncertain and this week’s summit could shine some light on the topics, if not directly answer them.
Spanish Bailout, coming soon?
For months, the Spain Bailout situation has been a topic of great discussion and debate.
According to recent reports, November is the likely time Spain will ask for a Sovereign bailout.
The S&P downgraded Spain’s ranking last Wednesday evening, October 10th. “The outlook on the long-term rating is negative.” the S&P said in their document concerning the downgrade decision.
Spain’s S&P credit rank was downgraded to “BBB-” from “BBB+” Wednesday.
The S&P report also said, “The deepening economic recession is limiting the Spanish government’s policy options.”
Will that be the final nail in the coffin driving Spain to ask for a bailout? I wrote this article about it last week. You can read it here.
If Spain is rescued, the euro zone could be moving into closer fiscal union. This could be very positive news for the Euro. Forex traders around the world along with other investors and economists will watch this week’s summit closely.
Whether we do or do not see major decisions made this week, Thursday and Friday are definitely worth paying attention to.
Leave your thoughts below.
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