Surviving the Previous Crisis

The debt stricken countries in the Euro zone like Greece, Spain and Italy were literally struggling for survival. The widespread discontent among the general public ushered in some social unrest as well. However, the governments of the debt stricken nations have been able to figure a feasible way out of the crisis with the help of external stimulus from European Central Bank and other financial organizations. The austerity measures put in place by the governments have worked a lot to resolve the crisis. Though the crisis is far from over, it is true that the situation has reached a stage where it has stopped deteriorating any further.

The Emerging Political Scenario

UE crisisThe politics in Europe is, however, pointing towards the emergence of another crisis. There have been allegations of corruption against the Spanish Prime Minister. On the other hand, the former Italian premier Silvio Berlusconi has gained an edge over the present Italian Prime Minister Mario Monti in the most recent opinion polls. Berlusconi, who resigned who resigned from his post more than a year ago, has made it clear from time to time that he would change some of the policies of Mario Monti, the present Prime Minister of Italy. The Spanish premier Mariano Rajoy has been tireless in his efforts to rebut the allegations of corruption against him and this has added to the risk of holding Spain’s debt.

Re-emergence of the Crisis

Analysts express the view the developing political scenario may hamper the ongoing processes and create new complications in European economy. Some are even opining that a new crisis may set in and make the situation in the Euro zone unstable once again. Berlusconi’s announcement of undoing some of the policies of the Italian government has earned him immense public attention in his favor. Therefore, it is almost certain that Monti will face tougher challenges in implementing his policies and it will be a serious hindrance in his fight against debt crisis.

Forex traders need to be alert at this crucial time and need to maintain a close vigil on the political development in Europe. As speculations are ruling the market at present it is absolutely necessary to plan each and every step very carefully in order to avoid incurring losses. The political scenario in Europe has made the crisis even more volatile and has dropped forex traders in a precarious situation just when they had begun to see some positive signs.

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