Euro set for worst quarterly performance

Europe’s single currency remained in its trend lower on Tuesday and racked up further losses against the US dollar as it headed for the worst quarterly performance it has ever seen. A combination of uncertainty in Europe and loose monetary policy schemes have helped pile pressure upon the euro.

Since the beginning of the year, the euro has declined over ten per cent when compared with the greenback. The European Central Bank’s quantitative easing programme was launched this month and had been anticipated for some time, prompting investors to bet on a weaker euro due to the coming flood of new euros.

Worries over Greece have added to the mix, as it still remains uncertain whether the nation will secure all the financing it needs to avoid bankruptcy. The latest developments highlight that Greece’s problems are set to continue, as it failed to agree a package of economic reforms with its lenders on Monday.

The euro came under added pressure on the news and on building anticipation that Greece stands a chance of running out of money this month, unless it receives a cash injection from its lenders.

Angela Merkel, chancellor of Germany, has adopted a more patient tone and stated that there is some flexibility in the reforms that Greece adopts, however, she insisted that “the overall picture has to fit”.

"The question is: can and will Greece fulfil the expectations we all have?" she added.

Alexis Tsipras, prime minister of the heavily indebted nation of Greece, has insisted they are working towards seeking “an honest compromise” with their lenders, but not to “expect an unconditional agreement from us”.

The Greek government remains at odds with European officials over its bailout program and this deadlock is hurting the euro and the region’s economy as well.

Almost every item on the agenda is being contested over, from VAT increases on the tourism sector to reforms over pensions, and little accord has been reached yet.

It seems that the issue of Greece will continue to be dragged out due to the complexity of the technical talks over its economic reforms, according to European Council president Donald Tusk, who added: “I don’t foresee any breakthrough before Easter.”

The recent talks between Greek officials and their EU/IMF lenders in Brussels ended without any resolution, but slow progress has been made, according to Reuters. Talks will likely begin again next week and, while no agreement has been reached yet, “significant steps of progress were made”, Reuters reported a source to have said.

Whatever the officials decide, a recent poll made it clear that the majority of Greeks wish for a resolution to be reached. Earlier in March an opinion poll was published that showed 69.6 per cent of Greeks believe their new government should seek an “honourable compromise” with its creditors and resolve the crisis, according to a Marc survey for the newspaper Efimerida Ton Syntakton.

The drama surrounding Greece’s reform plans, the political rumblings over its longevity as a member of the EU, and the positioning of Greece’s European creditors, looks set to dominate the media for some time. However, there will surely be no actual Greek exit from the eurozone until its bailout extension expires in June.