Jay Mawji of Vantage FX (http://www.vantagefx.co.uk/) takes a look at news around the Eurozone on 23^rd January 2012 – including potential solutions to a second bailout for Greece.

“As Germany and France increase the intensity to find a solution to the Greek troubles, urging for a resolution, Wolfgang Schaeuble and other economists claim the current ‘bailout strategy’ will fail to meet the minimum targets.

As we speak, ministers in Europe are discussing what terms they are willing to accept from Greece to enable a second bailout for Greece. In the wings are various sets of negotiations. The Greek Government are desperately trying to get the private sector to accept a 50% haircut which would take the shape of current bonds being scrapped and newer bonds, on new terms being issued. The problem with this lies in the coupon (interest rate). The Greek Government are proposing a 3.5% coupon, however the private sector appear unwilling to settle for less than a 4% coupon. Sources are reporting that it may be agreed that private investors will accept as much as a whopping 70% haircut in certain circumstances.  Another option on the other side of the debacle is the agreement by monetary options such as the IMF and the ECB to step in and directly aid Greece. However, this appears unlikely as political pressures within Eurozone nations have almost certainly ruled out direct intervention from monetary bodies and non-political organisations.

Unfortunately Wolfgang Schaeuble (who you may remember made a few extremely pessimistic comments about the state of the Eurozone in the middle of the last year), the German economic minister, has said that any deal to help Greece would need to reduce their debt to no more than 120% of their GDP – something the markets feel that this current plan won’t achieve!

Whichever way a deal is decided, I’m not sure the markets will be comfortable with Wolfgang Schaeuble in the media again.”

Learn more about Forex trading and Vantage FX at http://www.vantagefx.co.uk/

Trading derivatives and Forex carries a high level of risk to your capital and you should only trade with money you can afford to lose. Forex trading may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.

About Vantage FX UK

Vantage FX UK is a currency trading broker based in the City of London, providing foreign exchange trading services to clients in the UK, the EU and the rest of the world.

What sets Vantage FX apart is its wide range of services and outstanding level of customer support. The company strives to provide an intuitive, interactive Forex experience by continually innovating and taking advantage of the latest trading technology, such as MetaTrader 4 and Expert Advisors.

Vantage FX also offers extensive educational resources to help give traders their edge, keep up with daily market commentary and try a Forex trading practice account. For further information, visit http://www.vantagefx.co.uk/