Greek property news

Wisdom from a viral joke email sent to me. I did not write it and do not claim any originality.

It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a 100 Euro note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the 100 Euro note and runs next door to pay his debt to the butcher.

The butcher takes the 100 Euro note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the 100 Euro note and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmers’ Co-op takes the 100 Euro note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit.

The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the 100 Euro note. The hotel proprietor then places the 100 Euro note back on the counter so the rich traveller will not suspect anything.

At that moment, the traveller comes down the stairs, picks up the 100 Euro note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

This is how the “Greek Bailout Package works”!

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This article is brought to you by: Holidaylettings and Angels Greek Island Homes

More than 80 per cent of Britons searching for a holiday home abroad are showing interest in the European countries that have been affected most by the global economic crisis as they hope to bag a bargain.

According to currencies.co.uk, Brits looking to buy abroad in the next 12 months have been considering well tried holiday destinations Portugal, Greece, Ireland, Spain and Italy with a recent surge in interest that it is thought will keep growing in the coming months. However, it is recognised that with present market conditions and despite the rising number of enquiries, it is unlikely that many of them will turn into purchases. For the most part, potential British buyers squeezed by the current austerity measures, remain unsure about the current economic climate and risk of buying abroad.

This will not have been helped by the increase in interest rates implemented by the European Central Bank in April, the first since 2008 to 1.25%, which has strengthened the euro against the pound. As a result, any major purchase in Europe has become much more expensive for British buyers, so most investors are tending to hold off for the time being.

It has been reported that the Greek economy is growing faster than the U.K. with a 0.8% GDP growth in the first quarter of 2011 (The UK. was 0.5%). Saying this, Greece still needs financial help from the Eurozone, so property prices may not be rising just yet.

The property market in Greece is currently quite depressed; prices achieved in Skopelos can be up to 30% lower than the equivalent three years ago. This means that canny buyers from around the world looking for long term investments and holiday homes are now taking advantage of the dip in the market. There are signs that things are moving as new buyers are coming in from the near and Far East, Africa and Russia.

As a holiday destination Greece remains popular, with more British people planning to go this year for a reliable break that delivers on expectations for a much needed ‘time-out’ of busy lives, days of sunshine and relaxation within the beautiful setting of the Mediterranean.

It is still possible to get a bargain holiday on the Internet. This year there are some good flight and holiday deals to be had as holiday companies realise they need to fill seats and holidaymakers just do not have the same levels of disposable income as before the credit crunch kicked in. This is good news for us holiday makers who don’t want to give up on our much needed week or two away but have to stick to a reduced budget, for this year, at least!

To take advantage of the current dip in the market and buy a home in Greece please see:

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This article is brought to you by Staysure

What is it about Greece and the Greek Islands that makes all who visit want to return again and again?

Could it be the people, beautiful coastline and crystal clear waters or maybe it’s down to the legend of Aphrodite casting her spell over the region?

Ancient Greece was the most advanced society of its time, so it’s ironic that the Greece of today is one of the few European countries intent on resisting change. That’s not to say that modern life has passed it by and the usual trappings of major tourist spots aren’t abundant, but what stands out is their determination to retain a sense of identity. It’s this national character, idyllic weather and some of the world’s impressive historic monuments that attract millions of tourists to the mainland and islands each year.

How to purchase property in Greece (northern Cyprus should be considered carefully to avoid getting involved with rows over disputed lands currently under Turkish control). There are restrictions for the purchase of property close to the Greek borders as an additional special permission is required. Such permission will be issued by the local Department Authorities. Permission to purchase of property close to the Greek borders is not granted to non EU citizens. Non EU citizens owning property does not confer EU citizenship, nor does it allow you to enter the EU without a normal visa.

Understandably for some the love affair with Greece means more than just a holiday destination, choosing to put down roots by purchasing property as an investment, holiday home and even a view to retirement. Before making the leap it’s advisable to rent a home within a chosen area and get to know what the village, town or even island is like to live in both in and out of season. Having made the decision to buy, the next step is to negotiate your way through bundles of red tape. Here are a few pointers on what to expect.

Greek tax number
Any foreigner intending to purchase property or do business in Greece is required to apply to for a Greek tax number.You must have a Greek Tax number to open a bank account. It’s not necessary to live in Greece or have a residency permit.

Bank account
All transactions are in Euros. You will need to set up a Greek bank account to pay for your legal advice, estate agent fees transfer money and pay bills. Payment of utility bills can be set up very easily by direct debit via the bank, and money can be transferred online. You will need to provide slips and receipts if you have transferred money into a different currency or bank account statements to show that the money is from a legitimate source.

Holiday Home insurance
If you intend to use your home only for holidays, insurance can be arranged through your Greek Bank for fire and storm damage. However insurance for theft may only available if you live in your property throughout the year. There are companies in the UK that can offer full insurance (3rd party for example), One of them is Staysure

Earthquakes
As Greece is prone to earthquakes, it’s vital to give any property the once over by a structural engineer, as no one wants to go to bed upstairs and wake up downstairs under a pile of rubble! Remember that some companies will not insure for earthquakes.

Utility connections
Some islands may have different requirments and regulations. – On Skopelos check that your chosen property is located inside or outside the town plan.  If your house is inside the town plan then utility connections should easily be available. If your house is outside the town plan then check what utilities, if any, are available. Remember it can very expensive  to bring these utilities in as you may have to buy the electricity poles that will go all the way to your house or, buy and install a water tank for example.  There are also other restrictions -  Please see the Buying a Home section from Angels Greek Island Homes for requirments and regulations.

Make it legal
All expenses for the conclusion of the final contract, including the tax on property transfer will be borne by the buyer. Each party will pay the fees of their legal representative who must be present at the signing of the contract, this is required by Greek Law.
To become the legal owner the sale or purchase must be authorised by a Public Notary. The contract won’t be legal until notarised. Make sure your lawyer ascertains the correct ownership of the property.
According to Greek law, the purchase contract, known also as a “Purchase Deed”, is signed by the buyer and the seller in the presence of :

A Public Notary
A lawyer appointed by the buyer
A lawyer appointed by the seller

Public Notary
Approximately 2.5% of the objective price or Tax Office estimation of the value or on the price declared in the purchase contract if this is higher.

Lawyer
Your Lawyer or Solicitor will normally charge between 1% and 2% of the sale value of the property. If he/she acts as a Power of Attorney on your behalf he/she may charge more.

Real Estate Agent
The Real Estate Agent’s fees are usually paid by the buyer.

For a Legal guide to buying property in Greece please see the Legal guide from Angels Greek Island Homes
Please remember that laws could be subject to change. Always consult a lawyer.

Insurance
Whilst we’re talking about the paperwork, it’s important to remember that once you have bought the property, you will need adequate building and contents insurance, particularly if unoccupied.

Why struggle in a foreign language or rely on costly translations, when you can save money and understand exactly what is and isn’t covered. Staysure holiday home insurance not only provides comprehensive building and contents cover, all policy documents are written in English, there is a 24-hour emergency helpline and English claims department.

Staysure.co.uk Ltd the over 50s experts specialise in providing low cost insurance solutions for over 50s living in the UK and expats living in Europe. Visit Staysure to get an instant online quote for Staysure.co.uk Ltd low cost Greek holiday home insurance.

Contact Us

Staysure.co.uk Ltd

Tel: 0844 277 0844 (UK)

Tel: 952 899 532 (expats)

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This report is brought to you by Ian Daly at Exel Currencies

If you strip away the political correctness, Chapter Three of the IMF’s World Economic Outlook more or less condemns Southern Europe to death by slow suffocation and leaves little doubt that fiscal tightening will trap North Europe, Britain and America in slump for a long time. The IMF report “Will It Hurt? It argues that austerity will do more damage than so far admitted. Normally, tightening of 1pc of GDP in one country leads to a 0.5pc loss of growth after two years. It is another story when half the globe is in trouble and tightening in lockstep.

The lesson of the 1930s is that politics can turn ugly as slumps drag into a third year, and voters lose faith in the promised recovery. Unemployment is already 20pc in Spain. If Mrs Salgado is wrong, Spanish society will face a stress test. We are seeing a pattern, first in Ireland, now in Greece and Portugal where cuts are failing to close the deficit as fast as hoped. Austerity itself is eroding tax revenues. Countries are chasing their own tail.

The rest of EMU is not going to help. France and Italy are cutting 1.6pc GDP next year. The German squeeze starts in earnest in 2011. Given the risks, you would expect the ECB to stand by with monetary stimulus. But no, while the central banks of the US, the UK, and Japan are worried enough to mull a fresh blast of money, Frankfurt is talking up its exit strategy. It risks repeating the error of July 2008 when it raised rates in the teeth of the crisis.

The ECB is winding down its lending facilities for the Euro zone banks, regardless of the danger for Spanish, Portuguese, Irish, and Greek banks that have borrowed €362bn, or the danger for their governments. These banks have used the money to buy state bonds, playing the internal “carry trade” for extra yield. In other words, the ECB is chipping at the prop that holds up Southern Europe.

What does this mean to you?

Its still early days to tell how this can pan out as most analysts are stating that as soon as the cuts come in it could spark more social unrest and any losses that were seeing now in the GBP – EUR should be eradicated when the cuts come in throughout Europe in the new year. However the talk of QE is starting to spread like wild fire from the US to the UK and our worst fears might just come through.

Anyone looking to buy Euros recently would have held there breath at around 12 mid-day on Thursday as the BoE announced whether or not they would continue the Quantitative Easing programme. However to everyone’s relief the BoE kept everything on hold for at least another month and after the release of this the markets took a positive look at the UK and Sterling began to gain against a basket of major currencies. Until the UK sees consistent growth it will be a nervous start for the next few months.

Outlook

Sterling has being pinned down by the Euro this week and any negative news released from the Euro zone has had little effect even after the down grade of Irish Bank AIB. It was strange to see the pound so week against the Euro this week because of some unexpected encouraging figures from the UK’s construction and services industry along with industrial and manufacturing figures.

The only conclusion most analysts have come to is that the talk of QE from the UK has put everyone on high alert and what looks like a perfect week for the UK on paper has not materialised. While the current rate of around €1.14 is far from the best we have seen this year, after seeing what QE has done to the pound last year, €1.14 actually looks like a good price at the moment. Anyone looking to buy Euros within the next 3 months might want to consider a forward contact to secure the rate or what most of my clients are doing is half cost averaging. (Half now and half later).

This weeks case study

This week we had Stephanie and Edward Stevenson as they had to start making payments for there property if they want to move in before their Christmas deadline. What I suggested they do this week was half now and half again next month before the next interest rate decision as the talk of QE was holding the pound back against the Euro.

During the week I explained to Stephanie and Edward that the BoE have their interest rate decision on Thursday and with the talk of QE we might see a surprise purchase of another 25billion and that this would see the pound drop drastically. After being asked my personal opinion on it I felt that it was too soon to be continuing QE and at the moment we have only heard of one BoE MPC member talk about adding to the QE programme and that when the minutes are released in a couple of weeks this will give me a good idea of which way the 9 members are leaning. I would then be able to guide you far better to the correct time to trade. So we decided to book early on in the week and secured at €1.1550.

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This report is brought to you by Ian Daly at Exel Currencies

Greece has turned up the heat on the country’s commercial banks by requiring them to boost lending to businesses and households in return for access to a new €25bn liquidity package.

Chief executives from Greece’s biggest lenders agreed on Tuesday to participate in a so-called “liquidity pact” following joint talks with George Papaconstantinou, the finance minister. Mr Papaconstantinou said each bank would sign a separate deal with the government which would be monitored by the country’s central bank, “so that we know these funds are really going to support the Greek economy.”

Greece has signed a preliminary deal with Qatar’s sovereign wealth fund that could clear the way for investments of up to $5 billion in the indebted European country. The memorandum does not commit either side to specific projects, a Greek official, who was not permitted to speak publicly, said. But he said the planned investments would cover tourism, real estate, transport, infrastructure, finance and energy projects.

Greek Prime Minister George Papandreou on Wednesday ruled out additional increases in his nation’s value-added tax, saying the government will find alternative ways to boost revenues. “There has been of course the possibility of (tax in) some products being raised further, but we’re seeing if we can find other ways of getting revenues rather than raising that further,” Papandreou said in an interview with Reuters Insider. Right now, the prime minister added, the government says “No’ to raising the VAT.

Greece will postpone stress testing the country’s banks for later in the autumn, a source at the central bank told Reuters on Monday. “The stress tests will not be done in September,” said a Bank of Greece official who did not want to be named. “

What does this mean to you?

In the long term this will have a positive effect for anyone looking to buy in Greece (see Property in Skopelos) as out side investment can only have a positive out come for Greece. This news if it does come true will make Greece look far more attractive for anyone considering the move over or for the medium to long term investment. However if your looking to buy soon and are sitting on Sterling then you will be sad to hear that the pound has lost momentum again for another consecutive week and over the last couple of days there has being more and more of QE.

To remind everyone of what happened to the pound the last time the UK decided to do Quantitative Easing, it turned out to be the first time we every saw near parity level between the 2 currencies. If looking to sell your Euros back to Sterling its just about as good as it gets but looking to sell Sterling to buy Euros then it might just stop you from making that big move. Earlier this week an MPC member Adam Posen said he thinks the UK should begin QE again to stimulate the economy. These comments instantly drop the Pound/Euro rate by over a cent by close of business that day and big cracks are starting to show in the UK and the road ahead is looking very bumpy.

Outlook

Sterling has continued to be hit by poor figures for another week with the main focus being on the mortgage approvals. Along with Adam Posen’s comments this UK weakness has given traders the excuse to sell the pound and this trend has not stopped. Looking forward to try and find some relief the UK is expecting Consumer confidence figures, Industrial and manufacturing figures along with the all important GDP estimate. Another round of negative data next week may just be the excuse the Bank of England need to continue QE.

This weeks case study

This week we had Mr Subedar who has being trying to sell his property in Spain to buy in England. We had discussed the possibility of doing a forward contract but due to the weak data from the UK we had decided to hold on as we were gaining each day. Mr Subedar sent over the deposit in case we had unexpected data that went in his favour. It was only just a couple of days ago we had a jump in over a cent thanks to the comments from a MPC member and this has favoured Mr Subedar but more importantly I suggested that he holds on as UK outlook was weak and this has turned out to have earned him an extra £3,660. He has now locked in a forward contract at €-£ 0.8658 and when his Spanish property does sell he will not have to worry about where the exchange rate is.

Next week

Next week we will be dealing Stephanie and Edward Stevenson again as they have to start making payments for there property if they want to move in before their Christmas deadline.

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This report is brought to you by Ian Daly at Exel Currencies

Following their visit to Athens from July 26 to August 5 for the first quarterly review of the Greek government’s economic program, staff teams from the, ECB and IMF issued a press release, noting that their overall assessment is that the programme has made a strong start.

BoG released its Financial Stability Report – July 2010, in which among other statistical figures BoG is stressing out that in 2010 credit risk is expected to remain high and also that Greek banks should consider (at the same time) initiatives like alliances and/or mergers to basically try and spread the risk.

The Financial Minister announced that Greece will increase the government guarantees offered on banks which will reach EUR 55bn bringing the entire support plan (including special government bonds and state preference shares) to EUR 68bn or 30% of GDP, still below levels offered by other EU-members in the past.

Greece expects to pass a tax reform bill early March, with a view to boosting revenues from 2011, the country’s finance minister said on Friday. “The big bet of our tax reform is the broadening of the tax base,” Finance Minister George Papaconstantinou told a news conference. His comments came after Fitch and Standard and Poor’s both downgraded the debt-laden country’s rating earlier this month over concerns about its deteriorating finances, sending its bonds and stocks tumbling. “Moody’s will take its decision in the coming weeks,” Papaconstantinou said, adding that Wednesday’s rating downgrade by S&P had been expected.

What does this mean to you?

With a mix of good and bad news this week the GBP – EUR rate has not moved much and has stayed between €1.2003 – €1.2085. There has being added pressure on the pound from the PPI figures which is a break down of the overall GDP figure. The most important of the PPI’s is the Services which accounts for 80%, this saw a drop from 58.4% to 54.1%. If this continues this will most definitely see the pound lose against the Euro.

Outlook

In the short term the pressure is still on the pound and anything over €1.19 is still a reasonable exchange rate. However in the long term the pound should gain but if figures continue to disappoint gradually, the pound will struggle on its next set of GDP figures which some analysts are already predicting to be weaker then the previous quarter. The next set of interesting figures will be the inflation figures and the Minutes of the BoE interest rate decision. If we see more then one member voting for interest rate hike then this could help the pound rally against the Euro but best not to hold your breath for that as the BoE have already shown that they can be slow to move the base interest rate which is currently at 0.50%.

Last weeks case study

Last week we had a Miss Jennifer Steed who has to make her monthly mortgage payment along with bills which comes to €1,695. As this payment is smaller then a typical payment I suggested that Jennifer be put into one of our Group Bookings to achieve a better exchange rate.

What Excel did was group Jennifer’s funds with 15 other clients who were looking to exchange roughly the same amount and in total we ended up buying €25,500. Which meant our bank gave Excel a better exchange rate which we simply passed onto all 15 clients. This meant that instead of getting an exchange rate of €1.1725 we were able to achieve a group rate of €1.1931.

This week

This week we will be continuing to deal with Jennifer as over the next 2 weeks she will need to make a larger payment for building maintenance she’s having done on her property.

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This report is brought to you by Ian Daly at Exel Currencies

Banks stress test results are satisfactory

The Greek banking system had banks covering the full spectrum of outcomes. The 3 larger players i.e. NBG, EFG and Alpha Bank and Hellenic Postbank were “in the money” posting capital ratios comfortably over 6% under the most adverse scenario that a double dip recession would make banks go under,

The systems fourth largest bank came in right “on the money” as Piraeus Bank showed that it had just enough capital to withstand the adverse sovereign shock with its Tier 1 coming in at 6%. The one that failed was troubled ATE Bank being “out of the money” with its capital position falling short at 4.4% under the adverse sovereign shock scenario, which was by no means a surprise for market participants. Both Cypriot banks were able to receive a comfortable pass grade as well.

The government was quick in announcing its support to ATE Bank, while we expect developments on that front as it pertains to its capital enhancement options as well as the outcome on the offer received. Overall the results did not hold any major surprises, nevertheless there could be developments regarding Piraeus Bank’s offer for the state’s stakes as its borderline performance could deter its chances of a successful outcome.

The domestic banking system shall undergo another round of stress testing in September as per the provisions of the newly established EUR 10bn Financial Stability Fund.

What does this mean to you?

In light of the Stress test report the Euro has being little changed against the Pound at €1.1978 even though the Stress showed that the major banks in the Euro zone would be safe if we were to see a dip in the global recovery. This is due to the strength from the pound that had seen its GDP grow at its fastest pace in over 4 years to 1.1%. On the other side of the pond, the Euro has gained against the US dollar after the stress test results broke and has climbed to $1.30 earlier this week.

In the short term there still seems to be pressure on the pound and if you can achieve anything over €1.19 then you should take it straight away. However in the long term the pound is still under valued and if time is on your side then it will be well worth waiting those couple extra months before the UK has its next set of GDP figures which some analysts are predicting to be weaker then the previous quarter.

A case study

Last week we had a client who had to transfer £6,500 into Euros. Last week we saw the GBP – EUR rate open at €1.1813 on Monday morning and our client wanted to achieve a minimum rate of €1.19.

What Excel did was analysis the week’s figures and guided the client to the right time to trade which meant we put in place a Stop Loss order to insure he did not get a terrible rate if the rate dropped unexpectedly.

On the Monday Excel asked the client what would be the lowest rate he would want to achieve which was €1.17, so Excel put a Stop Loss order in which meant that if the rate dropped to €1.17 anytime over the week (24/7) then it would automatically buy for him and he would not end up achieving a rate lower then €1.17.

As the week went on we had informed the client about what figures were to be released and how they might affect the exchange rate and in the end we held off till the Friday when we saw better then expected GDP figures released. The Pound gained against the Euro straight away and we were then able to achieve a rate of €1.1955. The client was obviously more then delighted that we achieved a rate better then what he was hoping for and it was all done without major risk involved.

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Written by Mathew Edwards, Foremost Currency Group (www.foremostcurrencygroup.co.uk)

Last week we witnessed another volatile week for Sterling against the single currency with a 3.2% fluctuation in exchange rates across the week. In real money terms this equated to a difference of over £5500 when purchasing €200,000.

The movements came following a series of economic announcements in both the UK and the Eurozone, further proving the fragile state of both economies and in turn their respective currencies.

The main details of note from a UK perspective came in the shape of the consumer price index (which is a measure of inflation), showing a hike by 0.6% taking the annual rate to 3.7%, higher than the expected 3.5% that had been forecast making the current level the highest seen in 17 months.

This was followed by the bank of England minutes which showed an expected 9-0 vote from the Monetary Policy Committee to hold interest rates at 0.5% and pause its quantitative easing program at £200. The final piece of data released on Friday saw the UK’s budget deficit revised down to £156 from £163, providing a glimmer of hope and welcome news for buyers from the UK in light of a good deal of otherwise negative variables.

With reducing this figure a top priority for newly instated Prime Minister Cameron and Deputy Prime Minister Clegg, the news has been well received as the new coalition government attempt to bring the UK out of the financial crisis it is still in.

In the Eurozone, the biggest news of the week came from Germany where Chancellor Angela Merkel announced a ban on naked short selling. This caused investors to sell off the Euro causing some short term weakness for the single currency. Also, Spain’s central bank has decided to bail out regional savings bank CajaSur with $621.75 million (500 million euros), causing investors to worry that Spain’s savings banks are in more trouble than the country can handle. This was followed by negative economic sentiment figures from Germany, Greece and the Eurozone as a whole. The fragility of the Euro is sending shockwaves through the EU, as in the case of the Greece bail out package, Greece will benefit yet the German economy will suffer. As these countries lean on one another in the interest of generating support for the single currency, it inevitably feels the strain of such economic unrest.

Euro weakness hurting the pound (Risk Aversion)

The weak Euro is also not helping the pound. All of the euro worries have led to general weakness in risky assets and that’s typically not good news for sterling. It’s more selling of risk than anything else – Sterling is seen as a riskier currency, and so when things are uncertain as they are now, it drives investment towards the safe haven US Dollar – that’s why we have seen Dollar strength of late, and the pound and Euro are comparatively weak. This trend was kick-started by the downgrading of Greece’s sovereign debt rating and as people took to the streets of Athens, concerned investors moved their money from the Euro to the safe haven US Dollar. The downgrading of Spain and Portugal swiftly followed and a fortnight ago at a summit of EU leaders in Brussels, reports surfaced of Nicolas Sarkosy threatening to pull France from the Euro if Germany failed to fall in line with the proposed bail out plan for Greece. Although these claims have since been denied, Germany did conveniently change their tact and agreed to fall in line.

What does this mean for people buying property in Greece?

For people looking to buy a property in Greece or on any of the Greek Islands, this may be an opportune time to take advantage of the weakening Euro. If you are looking to exchange Sterling, Scandinavian Krona or Swiss Francs to Euros for your property purchase on Skopelos or anywhere throughout Greece, you are guaranteed to get a good live commercial rate when using a specialist in foreign currency exchange. The difference between a commercial rate and the tourist rate can mean a difference of thousands when exchanging larger sums. Specialists can be found at brokerages like the Foremost Currency Group www.foremostcurrencygroup.co.uk , where I will be able navigate you through the entire process of foreign exchange, keeping you aware of what the markets are doing and why.

Contact Mathew Edwards - Click here
Currency consultant and FX Trader at Foremost Currency Group
www.foremostcurrencygroup.co.uk

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Sterling makes the most of its I’m-not-a-euro credentials. Euro has no such defence to Greece’s problems.

The pound drifted down from €1.14 to €1.13 before jumping nearly two cents higher on Thursday. It peaked at €1.1550 on Friday and opened in London this morning at €1.15.

Sterling has been doing its best to develop a career in not-being-a-euro. With the problems in Greece holding investors’ attention, the pound wore a badge of non-involvement on its sleeve.

The Bank of England’s Quarterly Inflation Report (it does what it says on the tin) raised the spectre of a further round of quantitative easing. It was a possibility that sterling’s supporters would have preferred not to see. There is still the impression – warranted or otherwise – that the Bank is happy to see the pound weaken and that it chooses its language to help that cause.

And if the statements out of Paris, Berlin and Luxembourg over the last few month are anything to go by, the majority of Euroland finance ministers would like to see a more competitive (i.e. weaker) euro. This might explain why they have put so little effort into reassuring investors about their plans to help Greece out of its budget bind. An ‘agreement’ in that direction masterminded by the EU last week was worth less than the very small piece of paper it was printed on. In order to gain the approval of France and Germany it had to be pruned so severely that all it said was ‘Don’t worry’. Its exact wording was ‘Euro area member states will take determined and coordinated action if needed to safeguard stability in the euro area as a whole.’ As reassuring statements go it was useless.

It did not help matters for the euro when revised figures for the fourth quarter of 2009 showed slower economic growth than previously thought. Until EU leaders can formulate a coherent and credible plan to make Greek government bonds saleable the euro will remain weighed down by fears about the fiscal viability of Club Med.

After three months spent between €1.09 and €1.13 the pound has attached itself to a slightly higher range between €1.13 and €1.16. For the moment, the euro’s Greek albatross is a significant burden, balancing investors’ slightly different worries about Britain’s political and financial situation. Moneycorp suggests that buyers of the euro investing in the Greek property market should take advantage of any spikes to hedge 50% of their exposure.

The pound and the dollar are likely to strengthen further against the euro. This is subject to the UK economy continuing to claw its way out of recession and the decision of what the Euroland finance ministers will do to help the economy in Greece. In this short term situation, buying property in Greece is cheaper for UK and US buyers.

It is always best to transfer currency to Greece via the commercial rate and not the tourist rate. Currency specialists like Moneycorp often offer much better exchange rates than high street banks, and their expert dealers offer you guidance to help to ensure you are sending your money to Greece when the exchange rate is at its peak within your given time frame

It is always best to transfer currency to Greece via the commercial rate and not the tourist rate. Currency specialists like Moneycorp often offer much better exchange rates than high street banks, and their expert dealers offer you guidance to help to ensure you are sending your money to Greece when the exchange rate is at its peak within your given time frame

For information about setting up a bank account in Greece and Skopelos please see: Legal info

To find out about the best ways to transfer money to Greece and Greek Islands

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Roger Fox – Glossa Houses, Skopelos, Greece

Within minutes of France and Germany publicly pledging support for Greece in its struggle to reduce the budget deficit, the euro went from 1.15 to 1.13 against the pound.

Two hours later, when it became clear that no figures were going to be attached to these pledges, the pound went back to 1.15. Two days later it is 1.152 and the currency markets are predicting that the euro will weaken further over the short term.  Today Monday 15th February 2010 the euro is 1.157 – Moneycorp

Clearly, this situation will continue until “support for Greece” becomes a proper financial package. Under normal circumstances, this would be a job for the IMF, but it is difficult for leaders of the eurozone countries to have the IMF saving the euro.

Perhaps more important in the world of realpolitik is the fact that the current head of the IMF is Dominique Strauss-Kahn and a potential future challenger to French President Sarkozy; the sight of Strauss-Kahn riding in on a white charger to rescue the euro would be politically unwelcome – to understate it massively. Therefore expect delay.

Greece has two important dates coming up when the government has to repay outstanding loans – 20th April and 19th May. Given that a Greek default cannot be allowed to happen, something will have been fixed up by then. The smart money says that the eurozone leaders will swallow their pride and allow the IMF to sort out a loan for Greece.

Before that happens, the pound and the dollar are likely to strengthen further against the euro (subject to the UK economy continuing to claw ts way out of recession), making Greek property cheaper for UK and US buyers in the short term.

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