Spain agreed today at a meeting of EU finance ministers that some smaller banks may be allowed to fail during the financial crisis- an outcome they had previously said would not be allowed to happen. The news caused the Euro to weaken sharply again this afternoon, as creditors realised they may lose more money. So far Spain has been practically bailed out in all but name with the recapitalisation of their banks being achieved from European money, however they have not had to contend with the same conditions of receiving a bailout like Ireland and others have had to.
To me it seems unlikely Europe will manage to come to an easy solution as to how to meet the conflicting needs of different member states so Euro weakness in the short term is still likely to major factor. However sterling weakness may also be apparent during next weeks GDP data so if you are selling a property in Europe don’t despair quite yet as I don’t think the rate will be one way traffic.
Should UK GDP next week be particularly weak then the pounds recent run against the single currency may reverse slightly as markets try and second guess what the Bank of England will do in response. If you are looking to sell euros (or indeed any major currency by transfer) then by all means feel free to get in touch with me simply by e-mailing Colm at [email protected] and I would be happy to help.