The chancellor George Osborne and the Prime minister have both suggested that they do not want to see the UK contribute any more money to the next Greek bailout.
The Eurozone is in grave danger according to many commentators and there is widespread speculation that the problems in Greece may be the downfall of the single currency. We are also hearing rumours that the EU were aware that Greece had lied about its key economic indications in order to get into the Euro in the first place. This is further undermining the EU and highlighting the shortfall of a single currency for such a large and diverse economic area.Despite what appears to be a stonewall and fundamental issue for the euro, the single currency has not lost a huge amount of ground as a result.
EUR USD has fallen a modest 3% since February, while EUR GBP has actually gained 4.4% since February, somewhat surprising consider the situation the euro is in. The reason for this is that investors have chosen to focus on interest rate outlooks, and as the UK has not hiked rates while the EU has, the single currency has made gains over sterling.
The next key development for Greece could be this evening when the next vote for Austerity measures and the bailout take place. This could well cause some Euro strength, if a package is agreed. Despite UK politicians claiming we will not make a contribution, we have to pay £1billion to the next package from the IMF as it has already been agreed. not great news considering our own budget deficit and economic problems.