belfasttelegraph

Saturday 18 May 2013

Referendum will rock already unsteady boat

You can call the financial markets many things, but certainly not predictable.

Just when we thought the eurozone debt crisis had been sorted out, the Greek prime minister, George Papandreou, throws a curve ball - the like of which hasn't been seen since Gordon Brown revealed he liked listening to popular beat combo, The Arctic Monkeys.

It's unlikely Gordon really did have all the records - as he probably called them - of the Sheffield band, but it seems Mr Papandreou really is going to hold a referendum on last week's debt deal.

The ramifications of the premier's move cannot be underestimated and will be causing consternation by the many other European leaders, who spent hours on end last week trying to hammer out a deal.

They, quite rightly, will feel that they have bent over backwards to try and help Greece, only to be thanked with a slap in the face and a 'don't call us, we'll call you'.

You can only imagine the phone call which no doubt took place between Angela Merkel and new father, Nicholas Sarkozy, today when they heard the news. If it weren't filled with Gallic and Germanic expletives then I'll take a 50% haircut myself.

The fact the banks, who had lent to Greece, had agreed to reduce their credit by half was seen as a major coup, but it seems that deal won't be enough to persuade the Greek public.

Polling in the region has revealed around 60% of people there believe the deal was bad for the country, so the likelihood that the referendum is passed is slim.

Cue market mayhem with a quick look at the board showing what stock market traders refer to as a bloodbath, with every major exchange in the world in negative territory.

Even gold, normally a safe haven investment, lost ground yesterday.

And a relatively positive uplift in UK gross domestic product of 0.5% wasn't able to match the battering ram of negatively which followed Mr Papandreou's decision.

We all know how important the European, and particularly the Republic's, trade is to the Northern Ireland economy.

Now that's it's been put in doubt, we should all be worried because without it, our export potential will be shorn of potential and we'll all be operating in increasingly difficult conditions.

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