Germany warns Greece as Euro climbs

As Greek Prime Minister George Papandreou yesterday made the shock announcement that a Greek referendum was proposed ahead of accepting the Eurozone rescue package, Germany has warned that there is no room for renegotiation.

Political plate-smashing seems to be the order of the day, as Mr Papandreou had not mentioned the referendum as a condition of accepting austerity measures in the deal announced last week. While the Euro weakened yesterday, improving exchange rates by 2c against the Pound, the Greek PM will now fly to emergency talks on Thursday – the same day that the European Central Bank announces whether there is to be an interest rate cue in the Eurozone.

All in all the direction of the Euro is sensitive to developments in the next 48 hours. While we have relatively cheap rates for sending Euro payments at the moment, the potential for a reversal if the talks are successful and interest rates are not cut should not be underestimated.