If this year we saw a school report for the Eurozone it would almost certainly say “could do better”, in reality the situation in Europe is no better than it was this time last year. The Spanish Banking system is in crisis and its debt level is likely to increase to over 90% of GDP next year, Greece keep’s getting bailed out and has no clear plans to pay anything back and certainly there will be more problems in other member nations such as Italy, Portugal and Ireland to name but 3 in the year to come.
I think of the major currencies the Euro could be in for the toughest time in 2013 with the core of the problem being that they simply have no clear strategy for getting out of their ever increasing debt spiral. They keep trying similar things time and time again expecting different results and I know I’m not the first person to think that this might be the definition of insanity.
I saaw a documentary the other night surrounding Spain and even some of the Pharmacies over there are currently not receiving the money they need from the Government which will in no doubt lead to huge problems in early 2013 should this trend continue – I think things have been put to bed for this year but come January/February and the end of the Fiscal Cliff talks the Euro will be front page news once again.
Expect Sterling to break through the record highs seen this year on more than one occasion in 2013.