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Political discussions in Greece remained at a stalemate today, pushing the country closer to financial default. With Greece due to run out of money as early as June and no Government in place to negotiate aid, analysts believe that there may soon be a Greek default leading to an exit from the Euro.
In what turned out to be a preview of the European markets, the Asian markets fell today on worries over the Greek financial crisis and its possible exit from the Euro. The People’s Bank of China announced at the weekend that it was cutting the amount of cash banks need to set aside as reserves for the third time in six months to inject cash into the economy after recent figures showed a continued slowing in economic growth.
Speaking at the House of Lords today, the Queen said that the Government’s first priority would be to reduce deficits and restore economic credibility in order to boost growth. The Queen also set out a legislative agenda that will structure reform in banks and adult social care as well as making changes to state and public sector pensions. The Queen said “My Government will bring forward measures to modernise the pension system and reform the state pension creating a fair simple and sustainable foundation for private saving. Legislation will be introduced to reform public sector pensions in line with the recommendations of the Independent Commission of Public Service pensions”. The Queen’s speech is prepared by members of the Cabinet with the intent to set out the legislative agenda for the Parliamentary year.
Increases in prices, tax hikes and a quieting of the construction economy could indicate the recession is deeper than originally believed and recovery will take longer than economists predict. Adding to these worries are increasing concerns about the Euro zone crisis and the lack of support from the Government regarding kick-starting growth.
Gao Ziqing, head of the China Investment Corporation (CIC) said that they are not buying European Government debt but are still “looking at opportunities in Europe.” This comes as a blow to the Euro zone, as the fund, which has approximately £275 billion under management had been seen as a potential lifeline that could go some way to helping resolve the crisis.
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