Like so many episodes of the long-running euro crisis, the latest one ended in a sea of green screens and a sigh of relief. Investors started to sense that a ‘Grexit’ might be avoided at the end of last week, sparking a sharp turnaround in markets. The weekend brought fresh discord, however, and at 7am on Monday morning it looked likely that markets would sell-off again. But, in the nick of time, a deal was announced. Markets opened higher and by the end of the day were almost 10% above the low point reached last week.
Summing it up
The agreement reached paves the way for a third bailout for Greece, with the value of the package estimated at between 80bn and 86bn euro. The deal will extend over several years and be funded by the European Stability Mechanism. Anyone thinking this represents a victory for Tsipras and Syriza should think again. The money will be used largely to repay existing loans, and the price paid by the Greeks for the package is predictably high. Greece has been given until Wednesday to pass new laws that will see value added tax (VAT) raised and pensions reduced. Automatic spending cuts will kick in if forecasts for primary budget surpluses are not achieved. In addition, assets owned by the Greek state will be put into a separate fund and sold off or leased out to generate fresh income. At one stage it was proposed that the money raised by the fund was to be used in its entirety to repay debt, but the final draft conceded that some of it may be used to recapitalise Greek banks and to fund growth initiatives. An additional concession in the draft was a reference to more European Union investment in Greece, although it is not clear how much of this is new money.
Family fortunes
Even now there are still hurdles to clear, as facilitating legislation must pass through the parliaments of other member states as well as through the Greek parliament. Recrimination and condemnation are widespread within Greece, in Europe and beyond. The saga may have been dealt with sufficiently well that politicians and bureaucrats can relax and enjoy a summer break. But whether this marks the end of the Greek issue is an entirely different question.
Optimists will argue that, when tested in earnest, the financial firewalls erected since 2012 have held firm. And indeed they did – peripheral bond spreads did not widen by much at any point over the last few months. However, those of a more guarded nature might reflect that, while the firewalls to financial contagion held strong, the coarse nature of the political conversation may have weakened the barriers to political contagion. ‘Project Europe’ was once about uniting the Continent around a set of high political aspirations. It is difficult to assess how much damage Greece has inflicted on this narrative, or whether Europe’s ‘family’ will emerge stronger, and wiser in the long run.
Bill McQuaker, Co-Head of Multi-Asset, Henderson Global Investors
Über den Manager:
Bill McQuaker leitet zusammen mit Paul O’Connor das Multi-Asset Team von Henderson. Er kam 2005 als Leiter des Multi-Manager-Teams zu Henderson und verantwortete den Henderson Multi-Manager Income & Growth Fund sowie weitere Fonds. Zudem war er für die Vermögensaufteilung der Fonds verantwortlich. Im Juli 2007 war er maßgeblich an der Auflegung des Diversified-Growth-Produkts bei Henderson beteiligt und wurde im Januar 2011 zum stellvertretenden Leiter des Aktienbereichs ernannt. In dieser Funktion beaufsichtigt er sämtliche Aktienportfolios von Henderson. Er managt den Henderson Horizon Total Return Bond Fund (ISIN: LU0756065164, WKN: A1JX0G).
Über Henderson Global Investors:
Henderson Global Investors, eine hundertprozentige Tochter der Henderson Group, ist eine weltweit tätige Anlageverwaltungsgesellschaft mit erstklassiger Reputation, deren Geschichte bis ins Jahr 1934 zurückreicht. Henderson managt ein Anlagevermögen von 123,5 Mrd. EUR (Stand: 31. März 2015) für Kunden im Vereinigten Königreich, in Kontinentaleuropa, der asiatisch-pazifischen Region und Nordamerika. Die Zahl der Beschäftigten des Unternehmens beträgt ca. 900 weltweit. Zu den Kunden zählen sowohl Privatanleger, Privatbanken und externe Vertriebsgesellschaften als auch Versicherungen, Pensionskassen, staatliche Organe und Unternehmen. Als reiner Anlageverwalter bietet Henderson eine Produktpalette, die von Aktien und Anleihen über Multi-Asset-Produkte bis hin zu alternativen Produkten reicht.
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