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Monday, August 06, 2012

Sentix Predicts 73% Chance of Euro Breakup

The sentix Euro Break-up Index for July has risen by 22% to 73%. The index mirrors the investors' perceived probability of at least one country leaving the Euro within the next twelve months.

The index predicts that there is a 97% probability that Greece will exit the Euro.

Unsurprisingly, Euro politicians (who have much to lose when the Euro collapses; eg status, ego and salaries) have been quick to panic and have been trying to talk markets up. Step forward Germany's foreign minister, Guido Westerwelle, who has warned Europe's politicians "not to talk Europe apart". He is quoted in the Telegraph:
"We need a strengthening, not a weakening of democratic legitimacy in Europe.
This is all very well, but the markets will only now believe actions not words (as even Draghi must now realise after last week's dismal showing by the ECB has proven).

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