Prices for precious metals met resistance as Greece continues to be the main focal point in the ongoing European financial crisis. Despite agreeing to strict austerity measures, including cutting 15,000 public sector jobs and cutting the minimum wage by 22 percent, the coalition leaders would not agree to make substantial cuts in supplementary pensions.
March 20th Deadline for Debt Repayment
Unless Greece receives the €130 billion bailout package, the country faces missing a €15.5 billion debt repayment that comes due on March 20th. Greece has been solvent for the past two years on the first EU/IMF/ECB bailout of €110 billion.
The two years of austerity measures have been extremely trying for Greece, with unemployment rising to 19 percent. Civil unrest has also sparked controversy as the overwhelming majority of Greeks are opposed to the troika’s austerity measures.
Greece Exit From the Euro
In an interview with a Dutch newspaper, Neelie Kroes of the European Commission stated that there would be “absolutely no man overboard” if Greece decided to leave the Euro. In addition, Dutch Prime Minister Mark Rutte told public radio that a Greek exit from the Eurozone now would be less of a risk than if it occurred in 2010 when the debt crisis in Europe began.
“It is in our interest that Greece remain [in the Eurozone] and to achieve that it must do all it has promised to do, but if that does not work out, then we are stronger now than a year and a half ago.” Rutte stated.
German Chancellor Angela Merkel was strongly opposed to the suggestion, stating that a Greek exit from the Euro would have an “incalculable” impact and reiterated her position on keeping the Eurozone intact.
In an event in Berlin on February 7th, she stated that, “Greece, from everything I know, won’t decide to leave the Euro,” she added “I don’t want Greece to leave the euro and therefore the question doesn’t arise. It doesn’t require a political response because it’s not something that’s on our minds.”
Precious metals, as well as much of the commodities complex have remained range bound as technicians try to gauge risk as the drama continues.