- Thanos Vamvakidis, head of European G10 currency strategy at Bank of America Merrill Lynch
Greece economy is expected to shrink by 4.5% in 2013, while the government debt is likely to soar to 189% of nation's gross domestic product. On Wednesday, Greek's government unveiled its tough austerity budget, soon after what, country's main labor unions have called a 48-hour strike in order to protest new austerity measures. Greece is facing the risk of bankruptcy if it fails to secure a 31.2 billion euro tranche of bailout money.
"Greece is running out of cash. The current strategy is really not working and there is substantial political risk," Thanos Vamvakidis, head of European G10 currency strategy at Bank of America Merrill Lynch, said Thursday.
"Greece is likely to receive its next disbursement of aid only because it's in everybody's interest to keep Greece ticking over until the next review. This is "muddling through" in its purest form," said Nicholas Spiro, managing director at Spiro Sovereign Strategy.
The Stoxx Europe 600 Index jumped 1.26 per cent to 273.70. Germany's DAX Index added 1.03 per cent to 7,335.67, while France's CAC 40 Index soared 1.35 per cent to 3,475.40.
© Dukascopy Bank SA