This is the question which looms on everyone’s minds at the moment from political leaders to global investors. Since it is evident that the political atmosphere in Greece is at an impasse and there is mounting ‘anti-austerity’ pressure in the upcoming election, it is looking more and more as if Greece will default and pull out of the EU. In addition, it has been reported that news is coming out of Brussels that there are talks about a possible end of the euro.

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Since the beginning of the recession several years back, business optimism has been steadily on the decline other than for very brief periods of time. However, since it appears as though the eurozone may be on the verge of stabilising, business optimism is on the rise once again but that is not preventing companies from stashing cash as a safety net. Optimism may be on the rise, but businesses are erring on the side of caution this time around.

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It appears as though once again Greece is on the precipice of defaulting on international loans as less than half of the country’s creditors voted in favour of a £172 billion bond swap. Along with 30 banks in Europe, HSBC, Barclays and the Royal Bank of Scotland voted for accepting the deal but this was not a high enough percentage to pass. In order to be free from defaulting, 95% need to be in agreement and those 33 banks are not enough to keep that from happening.

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Banks hoarding ECB cash causing Euro to hit lows

There are actually two things to be concerned with in the recent news about the Euro (single currency) hitting a decline which is the lowest in 11 months against the US dollar and the Japanese yen, the Euro has also hit a 10 year low against the Japanese yen. This is causing some amount of concern but on a brighter side, Italy has good news which gives a bit of hope to a doom-filled future.

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Will France be the next credit downgrade?

Word has been spreading that France could be the next country in the eurozone to experience a credit downgrade by Standard & Poor’s, which could exacerbate the already mounting panic. In fact, it is projected that the downgrade, if it happens, will be before Christmas which is causing concern over whether or not the euro can survive.

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Greek prime minister resigns as Greece forms ‘unified’ government

Although the news was released that Prime Minister George Papandreou has resigned his post in order to spearhead a new ‘unified’ Greek coalition government, there are still major details missing as to just how this new regime will operate. With such sketchy information, world markets are still in turmoil as to how this will impact the debt crisis in the eurozone.

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