2011 has been a year with a lot of news. From unrest across the Arab world, to the deaths of dictators, it has been all go. The earthquakes and nuclear emergencies in Japan caused major disruption to industry in the region while in the UK cities across the country burned in three nights of rioting. In such a year it would be easy to overlook the great Euro drama that has unfolded/
It is no exaggeration to say that the whole European project has been rocked to its core. The sovereign debt crisis that had been brewing, some would argue for a decade, has come to a head. The previously unthinkable step of elected leaders being replaced by so-called ‘technocrats’ had to be taken not just once, but twice with both Greece and Italy being judged incapable of managing their own affairs.
There has been talk about the breakup of the single currency, with many doubting whether it would be able to survive the pressures on it. This is clearly being seen very much as a last resort by the key European powers, and a great deal of effort and expense is being put towards keeping the currency afloat. Of course, not every EU member was on board with this…
The great David Cameron summit flounce has opinion divided. To the Eurosceptic wing of his party the use of Britain’s veto was seen as his greatest achievement. To others it was seen as a disaster, as none of the other member states that are outside of the euro joined, and an agreement was made that did not require Britain’s participation. It was seen by some as the EU leaving Britain.
Supposedly Cameron geared up for the tough task of negotiating by making sure that he was desperate for the lavatory. A full bladder is thought to concentrate the mind leading to better decision making processes. Whether this had any part in Cameron effectively running out of discussions will be something that historians may chuckle over in years to come when examining the international relations of this period.
The year end on a high for the eurozone however. The liquidity injected by the European Central Bank has proved to be just the tonic that the bond markets were looking for with investors and hedge funds alike returning. As far as financial planning is concerned it is too early to say what will happen with the euro, but it does look like it is odds on for a bumpy ride in 2012.
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