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29/07/2016

38% of investors see eurozone disintegrating in next 12 months

Euro & Finance

38% of investors see eurozone disintegrating in next 12 months

The downward spiral. [Arcomedy.com]

Investor expectations of the eurozone breaking apart rose to their highest level in two years in February, a survey showed yesterday (2 March), even after Greece agreed to a financial lifeline with its eurozone partners.

The Sentix Euro Break-up Index (EBI) gave its highest reading since March 2013, with 38% of respondents expecting the bloc to break-up in the next 12 months, up from 24.3% in January.

The EBI reached its high at 73% in July 2012, and touched its low at 7.6% in July 2014. The current poll was conducted from 26 February to 28 February with 980 individual and institutional investors taking part in it.

According to the latest poll, despite the solution which was found last week for Greece, a growing number of investors expect the Mediterranean country to leave the euro soon. Also, for Cyprus, the exit probability increases markedly. Last but not least, confidence in Portugal and Spain is eroding too.

The Greek national EBI climbs from 22.5% to 37.1%. Consequently, the new aid programme for the country does not seem to be convincing. A “grexit” now bound to be a constant topic among investors for the months to come.

The EBI for Cyprus rises from von 6.4% auf 10.5% (highest reading since September 2013). Also noteworthy are the again increased EBI for Portugal (2.5%, highest since December 2013) and Spain (2.1%, highest since March 2013).

In both countries, general elections will be held towards the end of this year. These could result in Greece-like situations where anti-austerity forces might come to power, the Sentix website says. 

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