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And whilst we want to stay positive and still believe that the 2021 season will open for the summer, booking flights and hotels in the current environment might be a little bit presumptuous and risky. Planning a yacht trip though? This we can do – considering that chartering a yacht is certainly one of the safest ways to enjoy a holiday during a global pandemic.

This month, we introduce you to Roditis Yachting – a full agency offering a wide range of services to yacht owners holidaying in Greece’s stunning Dodecanese Islands. From berth reservations, customs and formalities assistance, fuel and lubricants supply, through to food and provisions, technical support, fiscal services, VAT clearances, imports and customs procedure, as well as arranging the issuance of a Greek Yacht Charter License - Roditis Yachting can take care of it all!

We caught up with the company’s manager Michalis Roditis to hear how they’re preparing for the upcoming season.  

Although yacht holidays are one of the safest ways to travel during a pandemic, it’s undeniable that 2020 was a difficult year for the sector. How did you navigate the challenges the COVID-19 pandemic presented you with last year?

2020 was certainly a difficult year for us. As a response to the COVID-19 outbreak, the Greek authorities implemented a number of strict measures, including a ban for certain nationalities, including travellers from the USA, Saudi Arabia, Israel and Russia, who weren’t allowed to enter our borders. This restriction impacted us greatly as this is where our main clientele is from – both for private yachting and charter.

In addition to this, there were also border closures between Greece and Turkey and we saw a dramatic drop in yacht arrivals by almost 80% when compared to 2019. Fewer charter companies were able to fulfil their charters in the region as their contracts where strictly for embarking and disembarking at Turkish Ports only. However, we also witnessed a surprising rise in domestic guests who chose to charter a yacht as opposed to staying at a hotel. Foreign yachts which had a Greek Charter License also took advantage of the border situation.

It was a difficult year indeed and our business was down by 70%, however, the experience taught us a lot and we built the foundations for the challenges to come. This unexpected drop in demand motivated us to work hard to find new ways to make it happen!

How are you preparing for summer 2021?  

My background is in Commercial Shipping – a sector where no event can ever surprise us! In fact, over the years, ship operators have established a Safety Management System which consists of drills and crisis managing tools, including health management and outbreak issues. In line with this, Roditis Yachting will offer a unique service provision in 2021, which will include 100% electronic formalities and procedures, delivery of services based on an Outbreak Management Plan approved by WHO, which ensures that the use of vehicles and equipment, as well as the contact between our staff and the crew and the guests, will happen in the safest way possible. We are well prepared for this summer and are ready to guarantee the full safety of both our staff members and our guests!

Why should yacht owners consider using your services?

Since 1989, Roditis Yachting has proven to be a solution finder and a problem solver in all fields of yachting and maritime services provision. We’ve worked hard to build an amazing reputation and to deliver the highest level of services for everyone who chooses to trust us. Our agency has received many acknowledgements, including ‘Best Superyacht Agent’ at the Aegean Awards based on out first-class customer service, complete support, ample local knowledge, trust and transparency, long-standing contracts, efficiency, proactiveness, professionalism, open communication channels and value for money!

For more information, go to: https://www.roditisyachting.com/

Skiathos

If being in proximity to gorgeous beaches is your top priority when choosing the best Greek island for your trip, then look no further than Skiathos. With its 60 white-sand and pebble beaches lapped by an almost Caribbean-coloured sea and backed by lush pine forests, the island guarantees a mixture of truly unspoilt beauty and vibrant nightlife around its bustling harbour. The island also offers an excellent selection of trails and every summer, it becomes a hub for cultural events, concerts and art exhibitions.

Where to stay: Olivia’s Villas of Luxury

Zakynthos

With its rugged cliffs, sea caves and clear azure water paired with exquisite Greek tavernas and an abundance of water sports to try, Zakynthos offers much more than the crazy nightlife it’s famed for. Wildlife lovers also flock to the Ionian island to see the endangered sea turtles, which lay their eggs on Zakynthos’ white sands every year.

Where to stay: Olea All Suite Hotel

Mykonos

Mykonos needs no introduction. Loved by countless celebrities and famed for its beautiful beaches, glitzy bars and quaint old town, it is one of the most glamourous islands not just in Greece, but in the entire world. In addition to its lively nightlife, the island also offers an array of stylish restaurants, amazing boutique shops and ultra-chic hotels.

Where to stay: Cavo Tagoo Mykonos

Santorini

As one of the most popular destinations for weddings abroad and honeymoons in the world, Santorini is the perfect destination for a romantic getaway. With its iconic white buildings and endless views of the deep blue Aegean Sea, the island is a truly special place that should be on everyone’s bucket list.

A little-known fact is that Santorini is also a great destination for wine-tasting. Its crisp dry whites and an unfortified dessert wine called Vinsanto could be sampled at several local vineyards which host tastings.

Where to stay: Katikies Kirini Santorini

Rhodes

With its Unesco World Heritage-listed medieval old town and the Acropolis of Lindos, it’s safe to say that Rhodes is the best Greek island for history lovers. It’s a place where the Byzantines, Greeks, Venetian and Turks all left their marks, but the island offers much more than well-preserved ruins. From stunning beaches and postcard-worthy vistas to traditional tavernas, there’s something for everyone in Rhodes.

Where to stay: Lindos Blu Luxury Hotel & Suites

Colmar, France

Famous worldwide as a leading destination for wine tourism, Colmar offers more than just wine! With its cobblestone streets, markets, festivals, scrumptious food and picturesque buildings, Colmar promises to quickly become one of your favourite French towns!

Where to stay?

For a true taste of Colmar, stay at La Maison des Têtes. Housed in a lavish 17th-century mansion, it offers chic rooms, creatively prepared food and unmatched luxury.

What to do?

Visit Unterlinden Museum, La Petite Venise, the numerous amazing châteaus in the area (don’t miss Château du Hohlandsbourg which dates back to the 13th century), and obviously - drink all the wine.

Athens, Greece

Although it’s the capital of Greece, Athens is not necessarily the first destination that springs to mind when thinking about a holiday to the land of quaint island villages of squashed-together white houses, olive trees and endless sunshine. However, with its vibrant streets, ancient wonders, booming art scene and electrifying nightlife, Athens is definitely a city worth adding to your travel bucket list.

Where to stay?

Located in close proximity to the Acropolis and Plaka (the Old Town), AthensWas Hotel is a boutique hotel offering amazing views, modern decor and five-star luxury.

What to do?

Visit the Acropolis, the Pantheon, wander the streets of Plaka and Monastiraki and indulge in all the feta cheese and dips Greece is famous for.

Rijeka, Croatia

Named European Capital of Culture for 2020, Rijeka is Croatia’s third biggest city and is the perfect answer to those who don’t want to have to choose between a beach holiday or a city break. Combining history, pretty beaches and trendy restaurants, Rijeka is the ideal destination for travellers who have toured all major European cities and are looking to experience something different.

Where to stay?

Hotel Bonavia Plava Laguna benefits from a super central location and offers everything you could desire!

What to do?

Visit Trsat for breathtaking views of the city and Kvarner Bay, go to The Peek and Poke Museum, go shopping on Korzo and don’t forget to check what exhibitions, shows and concerts are on this year before your visit.

Plovdiv, Bulgaria

The second biggest city in Bulgaria and the oldest continuously inhabited town in Europe,  Plovdiv is an ancient city built around 7 hills, which offers a lot to history and art lovers! With its history, architecture, funky bars and restaurants and delicious Bulgarian cuisine, Plovdiv will be sure to exceed your expectations.

Where to stay?

Residence City Garden Hotel is a stunning five-star hotel close to central Plovdiv, which guarantees elegant decors, fine dining and utmost luxury.

What to do?

Visit the Ancient Theater of Philippopolis, the Regional Ethnographic Museum and the Old Town. The vibrant Kapana District is the best place for a drink and a meal after a day of exploring Plovdiv’s colourful streets.

The Greek Debt Crisis was one of the more recent economic disasters that required three bailouts. While Greece is far from out of the woods, here's a brief history lesson on what happened.

Algarve, Portugal

From vast stretches of sand to coves backed by cliffs, the Algarve is home to some of Europe’s most breathtakingly beautiful beaches. And as scenic as the beaches are, the region offers so much more! Historic castle towns, elegant villages, glitzy beach bars and freshly caught seafood have been attracting over four million visitors every year – and once there, you’ll see why.

How to get there

Faro International Airport is located four kilometres from Faro – the capital of the Algarve, with a number of European airlines offering direct flights to and from the Algarve.

Where to stay

For exquisite views of Carvoeiro Beach and its soaring cliffs, stay at Tivoli Carvoeiro Algarve Resort.

Croatia

Croatia has been a very trendy summer destination in the past few years and we can assure you that the ex-Yugoslavian country is worth the hype. From its trendy islands Hvar and Korcula, through to the historic towns of Split and Dubrovnik, all paired with picturesque beaches and the country’s eight national parks, Croatia is wildly diverse and offers something for everyone.

How to get there

Depending on the way you plan your holiday in Croatia, you can fly to Dubrovnik, Split, Pula or the capital city of Zagreb. Airlines flying to Croatia from major European cities include British Airways, Croatia Airways and EasyJet.

Where to stay

For outstanding views of Dubrovnik old town, stay at Hotel Excelsior Dubrovnik. Riva Hvar Yacht Harbour Hotel benefits from an ideal location in the heart of Hvar and a waterfront terrace overlooking the Adriatic Sea, while Radisson Blu Resort & Spa Split is a perfect base to explore Split and its surrounding Dalmatian islands.

Zakynthos, Greece

While the starriest Greek islands Mykonos and Santorini grapple with over-tourism, more and more holidaymakers are heading to the quieter, but equally stunning island of Zakynthos. With its rugged cliffs, sea caves, tiny cloves and clear azure water paired with exquisite Greek tavernas and an abundance of water sports to try, the island offers much more than the crazy nightlife it’s famed for.

How to get there

Flights to Zakynthos International Airport are available from most European major cities. Over 30 airlines operate flights to the island during the tourist season.

Where to stay

The Lesante Luxury Hotel & Spa or Olea All Suite Hotel.

Sardinia, Italy

Sardinia’s ultra-clear water is reason enough to visit the Mediterranean island. However, this doesn’t mean that the emerald water is the only thing that draws holidaymakers to the slice of paradise that Sardinia is. With its nearly 2,000km of coastline, white-sand beaches and fresh Italian food, Sardinia will teach you all about la dolce vita.

How to get there

International airlines operate year-round flights from cities across Europe to Sardinia’s three main airports Cagliari Elmas Airport, Aeroporto di Olbia Costa Smeralda and Alghero Airport.

Where to stay

Resort Valle dell’Erica Thalasso & Spa near Santa Teresa promises direct access to the sea and 5-star luxury.

Andermatt, Switzerland

And don’t worry, we haven’t forgotten about all the mountain lovers out there. The Swiss Alps are an obvious and logical option for both winter and summer holidays, and the charming village of Andermatt (1444m) offers everything you could possibly desire from your next Alpine adventure.

How to get there

Andermatt’s nearest international airports are Zurich, Milan and Geneva. They all have easy rail links to Andermatt, and even quicker road links using airport shuttles or private hire transfers.

Where to stay

For spectacular 5-star opulence, stay at The Chedi Andermatt – an exquisite deluxe hotel offering local hospitality paired with Asian touches.

Refugee crisis, political turbulences, economic struggles brought on by austerity and Brexit. Katina Hristova explores the crisis that the European Union has found itself in.

 

"The fragility of the EU is increasing. The cracks are growing in size”, warns EU Commission Chief Jean-Claude Juncker. With Italy’s Government crisis finally being resolved and the country’s shocking rejection of NGO migrant rescue boats, it has been easy to detract from the political earthquake that the third largest EU economy experienced and the quick impact that it had on the Euro. But Europe’s problems go deeper than Italy’s political turbulences. A month ago, Spain, the fourth biggest Eurozone economy, was faced with a very similar crisis and even though the country now has a new leader, analysts believe that the Spanish instability is not over yet. With the shockwaves of both countries’ political uncertainty being felt on Eurozone markets, on top of migration pitting southern Europe against the north and as the UK marches on towards Brexit whilst Trump abandons the Iran Nuclear Deal, which could mean the end of the transatlantic alliance between the US and Europe, is the EU in serious trouble?

 

Why is it so serious?

Billionaire Investor George Soros is one of those people that can sense when social change is needed and when the current cultural and political processes are about to collapse. A month ago, in a speech at the European Council on Foreign Relations, Soros claimed that: “for the past decade, everything that could go wrong has gone wrong”, believing that the European Union is already in the midst of an ‘existential crisis’. The post-2008 policy of economic austerity, or reducing a country’s deficits at any cost, created a conflict between Germany and Greece and worsened the relationship between wealthy and struggling EU nations, creating two classes – debtors and creditors. Greece and other debtor nations had sluggish economies and high unemployment rates, struggling to meet the conditions their creditors set, which resulted in resentment on both sides toward the European Union. Back in 2012, the European countries that struggled with immense debt, malfunctioning banks and constant budget deficits and needed help from other member countries were Portugal, Ireland, Greece and Spain. In order to help them the creditors countries set conditions that the debtors were expected to meet, but struggled to do so. And as Soros points out: “This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based”.

Although Italy finally has a government, after nearly three months without one, the financial markets are apprehensive about what to expect next, considering the country’s €2.1 trillion debt and inflexible labour market. On 29 May, fearing the political crisis in the country, the Euro EURUSD, +0.6570%  slid to a six-month low, whilst European stocks ended sharply lower, with Italy’s FTSE MIB I945, +1.43%  ending 2.7% lower, building on the previous week’s sharp losses. Bill Adams, senior international economist at PNC believes that: “The situation serves as a reminder that political risk in the Euro area hasn’t gone away. Italy is not on an irrevocable road to anything at this point,” he said. “I think what is most likely is another election later this year, and what we’ve learned is that outcomes of elections are very unpredictable.”

Spain on the other hand has made huge progress since being on ‘EU life support’ when ‘its banks were sinking and ratings agencies valued its debt at a notch above junk, on a par with Azerbaijan’. Since receiving help, the country’s economy has been growing, unemployment is not as high and its credit rating has been restored. However, with the Catalonia separatism, and the parties, Podemos and Ciudadanos who have emerged to challenge the old duopoly between the Popular Party (PP) and the Socialists, the political uncertainty in the country is set to continue.

Greece has been in a permanent state of crisis for a decade now, with its current debt of 180% of its gross domestic product (in comparison, Italy's is 133%). In less than two months, on 20 August, the country is due to exit its intensive care administered by the European Central Bank and International Monetary Fund. The EU will then have to come up with a new debt relief offer on the $280 billion Greece still owes – which could be challenging, as the ‘creditors’ are not in a charitable mood.

In contrast, Poland and Hungary are financially stable, however, both countries seem to be in opposition to the EU with regards to immigration, the independence of the judiciary, ‘democratic values’ and freedom of the press. Both governments have dismissed EU plans to share the burden that the Mediterranean region carries in terms of migrants arriving into these countries. In addition to this, Hungary’s Prime Minister is promoting an ‘illiberal’ alternative to European consensus, whilst Poland has sided with the US and against its European partners on a range of subjects, including the Iran sanctions and Russian gas pipelines.

And of course, let’s not forget the EU’s list of unsolved issues – the main one being Brexit. With nine months until its deadline, the terms of Britain’s exit from the EU are nowhere near finalised.

 

Make the EU an association that countries want to join again

Today, young people across the continent see the European Union as the enemy, whilst populist politicians have exploited these resentments, creating anti-European parties and movements.

Since its establishment, the EU, an association that was founded to offer freedom, security and justice without internal borders, has survived many turbulences. Although the current crisis is based on a number of deep-rooted problems, odds are that these challenges will be overcome. To save the EU, Soros believes that it needs to reinvent itself via a ‘genuinely grassroots effort’ which allows member countries more choice than is currently afforded.

"Instead of a multi-speed Europe, the goal should be a 'multi-track Europe' that allows member states a wider variety of choices. This would have a far-reaching beneficial effect."

And even though he isn’t offering a proposition for a bill that someone needs to draft and pass as soon as possible, he has opened a conversation - a conversation about moving away from the EU’s unsustainable structure. “The idea of Europe as an open society continues to inspire me”, says Soros. And in order to survive, it will have to reinvent itself.

 

According to many reports, Italy’s ongoing political failure has potential to bring the Eurozone crashing down, which in turn could cause mass impact across the globe’s economy, both short term and long term.

In a recent turnoff events, both parties Five Star Movement and Lega Nord have been committed to the Italian government following a period of limbo since the March general election. Italy currently represents almost a fifth in the Eurozone economy and is feared as “too big to be saved.” Giuseppe Conte has been appointed the interim PM.

Below Finance Monthly has collected Your Thoughts in this financial debacle, summarising some points of expertise form top reputable sources across Europe.

Daniele Fraiette, Senior Economist, Dun & Bradstreet:

Italy’s new prime minister, Giuseppe Conte, will need to try and strike a balance between reassuring European partners about Italy’s permanence in the eurozone, and the 5SM’s and NL’s overt intolerance towards European Union rules on budgets and immigration.

In the weeks before the resolution of the crisis, Italian bond yields rose to levels only seen at the peak of the debt crisis in 2012, dragging yields on other peripheral euro-zone economies’ debt higher. The spread between Italy’s 10-year government bonds and Germany’s equivalent-maturity bonds also soared, passing the 330 basis point mark. The political vacuum seems now to have been filled; however, the spread remains at levels which signal significant market concerns around the country. The end of the ECB’s bond-buying is an additional factor of concern as they could prompt a significant increase in Italy’s borrowing costs.

Italy’s overall macroeconomic environment has improved remarkably over the past years: real GDP grew by 1.5% in 2017 and looks set to expand further in the 2018-19 period, the current account surplus currently stands at around 3% of GDP and its debt service cost has dropped to below 4% of GDP, down from above 6% before the introduction for the single currency. However, at 132% of GDP, Italy’s stock of public debt is huge, and the ongoing political turmoil poses a threat to the country’s stability. Indeed, should the political crisis morph into a sovereign debt crisis, debt costs would soar and debt service become unsustainable.

If Italy defaulted on its debt (which is not Dun & Bradstreet’s baseline scenario given Italy’s strong domestic investor base), the survival of the eurozone would be irreparably compromised. There is also a risk that concerns over a possible referendum on the euro, repeatedly contemplated by the 5SM and the NL but eventually scrapped from their election manifestos, could trigger a flight of deposits from Italian banks, many of which remain saddled with high levels of non-performing loans.

Although the darkest hour of Italy’s politics seems to be over, tensions between the Italian government and the EU, as well as within the government itself, are highly likely to persist; political uncertainty will likely remain elevated in the quarters ahead and the risk of early elections constantly looming.

Roberto Sparano, Globalaw:

After the longest political crisis in Italian history, a new cabinet of ministers was appointed on Saturday. Technically, the new government needs the confidence vote of both chambers of the Italian parliament, but it seems likely that the vote will go in favour of the odd alliance between the 5stars movement and the Lega.

In the closing moments of his BBC TV commentary for the 1966 FIFA World Cup Final, Kenneth Wolstenholme said "They think it's all over," but in reality it was not! This is, more or less, what is happening now. Most Italians are happy that it is over and we are back to normal, however, in realty this is only the beginning.

Local elections are scheduled for the 10th of June, and both the Lega and M5S will campaign on different and opposite barricades. Campaigns can easily turn ugly in Italy, and the first objective of the new government will be to survive these next few weeks without any major clash between the two parties.

In fact, the new local elections will be the first referendum against Europe and the Eurozone.

As Italians, we always have difficulty owning up to our responsibilities, that is the way we are, and we have become experts in the art of shifting the blame onto others. Germany has, for many reasons, been the perfect target since the end of WWII.

The notion of external control was actually one of the factors that convinced Italian lawmakers and politicians to join the European Union in the first place. This is because, if anything goes wrong, or is hard to swallow and unpopular, the blame falls on the EU as an external body- and obviously the Germans!

This may be a hopeless situation... but it is not serious, like in the 1965 movie directed by Reinhardt.

I do not think that the Eurosceptic have been strengthened from the last Italian elections. The truth is that most people are not ashamed to feel anti-EU (given that the EU has served as a punching ball and a symbolic cradle-of-all-evil over the past decades). Two non-traditional political movements are only going to cash in on this feeling.

Italy’s political climate will have a consequential effect on the Eurozone and the European Union. I am convinced that the Lega is aware that we cannot leave the EU or the Euro (I cannot speak for the M5S since I do not think they have any policy or line at all), but they are also aware that the other Euro partners cannot afford Italy’s break from the Euro or the EU.

The current anti-European feeling will undoubtedly be used as a bargaining chip for other purposes, for example, to stop immigration or, even better, to accelerate the process of moving immigrants from Italy. If Germany and the EU play this the hard way it could be fun to watch, although, as an Italian, it will be painful. On the flip side, it could be the perfect opportunity to change the EU, although, while Lega and M5S are calling for a new and stronger Europe, nobody knows (including Lega and M5S) what a “stronger Europe” really means.  My idea of a stronger Europe … I fear it is exactly the opposite of the idea of the Lega.

The situation is unpredictable, some of the measures that form part of the “Contract” between Lega and M5S could have a beneficial impact on our economy, although the Italian debt will skyrocket and in the long term, this would have a devastating effect.

The real problem will be the Italian State rating and the Italian bank rating. If the new government leads to a downgrading, the ECB will not be allowed to acquire our State bonds. Due to this, quantative easing measures will cease to help our growth, and the banks will collapse.

Italian economics are already not brilliant (that is lawyerlish for awful). We are the slowest growing European member, our private sector has never driven, and our banks … well our banks are declining.

We are already a supermarket for foreign corporations; Chinese, Indian, USA and other European companies have already acquired most of the jewels of the crown in terms of brand know-how, and excellence. Despite this, if anything goes wrong, we will become a discount or outlet!

On the other hand, our history shows that Italy always manages to survive, after all, on April 25th each year we celebrate the victory against nazi-fascism in WWII.

Giuliano Noci, Professor of Strategy and Marketing, Politecnico di Milano School of Management:

Following a week of political uncertainty in Italy, international financial markets are recovering well. Analysts expect that the announcement of a new government and the unlikelihood of fresh elections indicate that no further disruption will occur.

However, the root causes of how Italy landed in this particular political situation – where the young Five Star movement and Matteo Salvini’s League won more than half the votes in parliament – must not be ignored.

Both parties – although internationally scorned for Eurosceptic views – were able to gain the support of the Italian population, playing on both their emotions and feelings of insecurity. Both delivered well-designed storytelling campaigns via social media rather than mainstream media – a technique neglected by other parties.

The population’s insecurity has two main manifestations. Firstly, the feeling that the EU did not do enough to help Italy during the mass immigration of refugees of Syrian war. Secondly, the sense that the EU is failing Italy in important economic areas. Five Star promised a basic income for the unemployed whilst they train and upskill, and the League pledged to reduce the burden of fiscal taxation on companies by introducing a flat tax system.

So, are the parties reaching the core of Italy’s problems and setting out the right solutions? This is a question which deserves careful consideration. In my opinion, the parties were wrong to use aggressive tactics to fuel the debate about whether to remain in the EU. However, they were very right to suggest that the European Union must significantly change the rules of the game. We are seeing problems not only in Italy, but in Greece, Spain and perhaps even France in the imminent future.

These are signs that the Eurozone is not working, which is most likely because the Euro project is incomplete. Although we have a unique currency, there is no unique system for managing the risk of banks or the unbalanced, heterogenous economic systems of each country.

In the long run, a lack of reforms will create a bigger problem for the Eurogroup than Italy’s political situation. Change must come from within the EU following this situation and discussions of structural reforms in the banking sectors, as well as a safety net fund, must begin.

If no change occurs, the 2019 EU elections are likely to be just as complex as Italy’s.

Stephen Jones, Chief Investment Officer, Kames Capital:

Following Macron’s victory, the eurozone was the ‘good news’ story of 2017 as the area’s economy burst into life and global investors returned in droves. This year has seen economic momentum collapse sharply and, perhaps more than coincidentally, populist pressures have brought the fault lines back to the fore. For the moment this is an Italian issue but these pressures exist in most eurozone nations.

Equity markets have weakened on these changes but Italian worries have largely reinforced a trend already in place. Elevated ratings, and analysts offering a very rosy earnings outlook, left markets vulnerable to poor news and a variety of geo-political developments have emerged to offer that challenge; fat profits were there to be taken.

These risk markets setbacks have, however, taken the steam out of rising short rate and long yield forecasts and will probably succeed in ensuring that quantitative easing is continued in Europe for longer than might otherwise have been the case. When the dust settles, this should underpin equity markets, allowing progress to be made afresh and from safer levels; the positive earnings outlook offered by analysts have good real-world support.

However, to be clear, this supposes that Italy stops short of turning a drama into a crisis. Those of us of a certain vintage know well enough that Italian politics are not to be trusted.

Jordan Hiscott, Chief Trader, ayondo markets:

I was recently asked If I thought the current situation in Italy, in regard to potentially leaving the EU, was a black swan event. My response was no; a grey swan would be a much more suitable adjective to describe Italy in its current state. The ultimate definition of this would be a risk event that can be anticipated to a certain degree but still considered unlikely. A black swan being an event that is not anticipated in the slightest.

Italy has the third largest economy in the Eurozone and this political turmoil, of once again populist vote, threatens the unity of the bloc. But the situation is further exacerbated by the perilous state of Italian banks. Indeed, this is nothing new and they have been in the poor shape for a while, and the only surprising part to me is that the market hasn’t been paying attention to this, until now.

The culmination of the situation is we now have a perfect storm. Another type of a coalition government has been formed and the cynic in me looks at Italian politics on a historical basis and questions if this is this indeed the end of an unstable ruling government or in the colloquial sense, papering over the cracks? This is coupled with a worsening financial situation for the nation’s major banks. The move on Italian two-year treasury yields last week was nothing short of astounding, with the range and volatility more akin to a cryptocurrency than of a bond from a first world country.

The Italian stock market is now almost completely unchanged on a five-day basis, given it was down over 7% at once stage last week.  In addition, to confirm this, EURUSD has moved from a low of 1.1520 last week to 1.1750. The next move will be key, but from my perspective I’m finding it hard to feel positive, even from a mean reversion perspective, for the pair, given the length and weighted negative implications surrounding Italy at present.

April LaRusse, ‎Fixed Income Product Specialist, Insight Investment:

In contrast to the European sovereign crisis, Italy is now an idiosyncratic story. Across Europe, the previous crisis hit countries such as Spain, Greece and Portugal are all on an improving path, reaping the rewards of structural reforms implemented after the crisis. In Italy, pension reforms were certainly a positive step, but the country failed to undertake the deeper changes needed to sustainably raise potential growth.

The two key parties are proposing a range of expansionary fiscal measures, cutting both income and corporate taxes and proposing a minimum citizens income of €780 per month. Although more controversial measures, such as asking the European Central Bank (ECB) to write off up to €250bn of Italian debt, have been dropped, investors will be well aware that these were considered serious policy proposals by elements of the new government.

Debt/GDP will start to rise once again and credit rating agencies are likely to start to downgrade Italian debt, in contrast to the rest of Europe where credit ratings are improving. This leaves us cautious on Italian spreads, especially in an environment where we believe the ECB will be winding down its quantitative easing purchases.

David Jones, Chief Market Strategist, Capital.com:

There is a familiar feel to the catalyst behind the increased levels of volatility that traders and investors have seen across all markets, leaving some wondering if we are going to have another Eurozone crisis along the lines of that involving Greece from 2016. At this stage that does seem like an overly-pessimistic view, but it’s not hard to understand why safe-haven buying is the order of the day.

An oft-repeated phrase from past Eurozone crises was “kicking the can down the road”, referring to deferring that country’s debt obligations. This time around it feels as if the political can, rather than the financial one is being kicked into the long grass - and this is what is spooking markets. One of the main worries for traders is another election in a few months could result in a populist government that wants to renegotiate Italy’s debt with the EU. This is running at around 130% of the country’s GDP - the second highest level after, you guessed it, Greece.

The obviously immediate casualty was the euro. It had hit a three-year high against the US dollar as recently as February this year. Since then it’s dropped back by around 8% to its lowest level since last July. There is a double-whammy behind traders’ decisions to sell euros. Clearly any uncertainty about Italy’s debt repayments and the country's commitment to the single currency doesn’t inspire confidence - plus this year already we have seen a resurgence in popularity for the US dollar after its slide in 2017 was the worst performance for more than a decade. It can always be argued that the market reaction is overdone - but whilst Italy’s political future remains uncertain, it’s a brave trader who calls the bottom of this slide.

European stock markets have also been hit. The Italian market is the obvious biggest casualty and is now down by 13% in just one month - but the German and UK markets are also lower as investors adopt the familiar “risk-off” approach at the slightest whiff of a possible euro crisis. Many world stock markets already had some fragility when it comes to investor sentiment after the sharp falls seen in February and an ever-increasing oil price - it is difficult to see these recent losses being made back quickly.

While some sort of “dead cat bounce” can’t be ruled out in the days ahead, as long as this political can-kicking continues, then investors are likely to remain cautious about taking on risk - so it could be a summer of European-inspired volatility across all asset types.

Tertius Bonnin, Investment Analyst, EQ Investors:

This had been a slow moving car crash in which the signs have been there for all to see; populist parties were the clear winners of the March election (nearly three months ago) and the two largest parties, the Five Star Movement and the Northern League, had been negotiating a framework for co-governance since. Surprisingly, a number of market participants had expressed that they didn’t anticipate the “change” in attitude of the two famously Eurosceptic parties towards the euro. It should be noted that Italy isn’t new to political uncertainty, with Italian voters seeing 62 governments since 1946.

The Italian President’s veto of the proposed finance minister, Paolo Savona, and the subsequent increase in the probability of another election caused a kneejerk reaction in the markets on Monday. These moves spilled into the Tuesday session as the Monday was a bank holiday in the US and UK. Trading volumes on the Monday were therefore relatively thin in comparison. Tuesday saw huge spikes in key barometers of relative risk such as the Italian-German government bond spread (difference in yield) and the Italian two year bond yield. Global banking stocks, considered most sensitive to a change in economic activity, also sold off. Despite the so called PIGS (Portugal, Italy, Greece and Spain) taking significant knocks, investors in relatively safe government bonds (German bunds, UK gilts and US treasuries) benefited from a “flight to safety” whereby panicked investors moved capital into less risky assets.

There had briefly been calls by the Five Star Movement’s leader to impeach President Mattarella. Under Article 90 of the Italian constitution, parliament may demand the president to step down after securing a simple majority. Italy’s constitutional court would theoretically then decide whether or not to impeach Mr Mattarella. Given the president had not violated any Italian laws, this route appeared relatively futile. On this impasse, the populist coalition appeared to have collapsed and the market took a collective sigh of relief as the Italian President moved to appoint ex-IMF director Carlo Cottarelli to run a short-term technocratic administration until the next set of elections. It should be noted that the Five Star Movement, the Northern League and Berlusconi’s party all said they would have vetoed this.

It is likely this development fed into the Northern League’s decision to call for fresh elections at a political rally, having seen an uplift of circa 8% in opinion polling. Investors once again panicked that the risk of future elections had the potential to not only reinforce the populist parties’ positions in both parliamentary chambers, but become a de facto referendum on Italy’s euro membership. After 2017 being relatively benign year for political risk, investors had been caught asleep at the wheel in terms of pricing in uncertainty in the political sphere.

By Friday the situation had turned around once again after the Italian President provided more time for the Five Star and Northern League parties to form a government; the former designate Prime Minister Giuseppe Conte was sworn into office while the key Finance Minister role went to a seemingly more pro-European, Giovanni Tria, who headed the Economy Faculty at Rome’s Tor Vergata University. Paolo Savona, the former candidate vetoed for this position will now serve as Minister for European Affairs in a sign that the new administration’s focus will be on fiscal expansion plans and rolling back reforms, rather than investor angst around fresh elections and euro membership. This rollercoaster ride in political uncertainty has been tracked by the spike in yield of the supposedly risk-free Italian government bond.

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Prepaid Financial Services (PFS), a leading e-money institution that specialises in prepaid cards and alternative banking services, has announced the launch of a programme for international relief organisation, Samaritan’s Purse, to provide financial aid to refugees and migrants across Greece.

Samaritan’s Purse has been operating programmes in Greece for over a year, improving conditions in refugee sites and bringing hope and dignity to refugees and migrants by providing water and sanitation infrastructure, shelter, supporting community initiatives, aiding people in accessing asylum services, and distributing emergency food, hygiene kits, and critical relief items.

This new cash programme will allow Samaritan’s Purse to further provide for basic needs by giving refugees and migrants access to prepaid cash cards. Given the varying needs of a diverse population, cash programming allows refugees and migrants to purchase exactly what they need in the local markets in a dignified way that supports resilience.

PFS are acting as the issuer of cards. Samaritan’s Purse is distributing the prepaid cards to vulnerable refugees and migrants across Greece. Of all the methods available for distributing cash, multi-purpose grants in the form of prepaid cash cards are the most appropriate for the context. The prepaid cards provide a secure method of distributing funds as cards have unique PIN codes with ATM and Point of Sale (POS) capabilities.

Noel Moran, PFS CEO said: “As the migrant crisis in Europe continues, PFS is pleased to provide a solution that will help Samaritan’s Purse manage fund disbursements, while also supporting financial inclusion, and giving financial stability to refugees and asylum seekers.

“Although the scheme has rolled out very recently, we are confident that this new method of distributing funds will alleviate pressure on Samaritan’s Purse, letting them focus on continuing to improve conditions and support people in camps.”

Sally Morson, Cash Program Manager for Samaritan’s Purse said: “Until recently, our main support was provided through in-kind distributions. Now, we are moving towards a cash based response where the refugees and migrants will be given the freedom of choice which promotes dignity and resilience. The prepaid cash card is a good modality because it is a secure way within Greece to access what they need in the local markets given the varying needs of a diverse population.”

PFS has a wealth of experience in delivering prepaid solutions that provide financial support for end users of charities, Local Authorities, and National Governments across Europe, offering card programmes that work seamlessly across borders and allowing refugees and asylum seekers to use prepaid cards for financial inclusion.

(Source: Samaritan’s Purse & Prepaid Financial Services)

Following talks in Brussels, the Greek government has agreed to unlock a further €10.3bn (£7.8bn) in loans from its international creditors, who have also agreed on easing the debt burden of Greece which totals €321bn (£245bn) - worth 180% of the country’s annual economic output. The tranche of bailout funds will be split into two payments: €7.5bn in June and €2.8bn in September. The European officials plan to extend the repayment period and cap interest rates.

However, the debt relief plan is far from the ‘upfront’ debt relief that The International Monetary Fund (IMF) has demanded. Poul Thomsen, director of the IMF’s European programme, said the IMF had made “a major concession”. “We had argued that (debt relief measures) should be approved up front and (now) we have agreed that they should be made at the end of the programme period.”

Germany was in opposition to the ideas about the debt relief, expressing beliefs that a debt relief could not be considered before the end of Greece’s current €86bn bailout programme in mid-2018.

"We achieved a major breakthrough on Greece which enables us to enter a new phase in the Greek financial assistance programme," said Jeroen Dijsselbloem, President of Eurogroup. He added that the package of debt measures would be "phased in progressively". This review was the first one under Greece's third eurozone bailout, secured in August 2015, after which Greek Prime Minister Alexis Tsipras called a snap election. This move happened only two days after the Greek parliament approved another round of tax increases and spending cuts, that were demanded by the creditors.

Europe - shutterstoc#D909E6After intense speculation over the possible consequences if Greece defaulted on its loan payments, the country has successfully made a €750 million ($834 million) payment to the International Monetary Fund one day before its first deadline.

Worries were rife within the international community, extending to speculation that the country would have to leave the eurozone. It was difficult to predict what effect this would have on the economy of other countries.

It is for now unclear how the Greek government – currently lead by Alexis Tsipras of Syriza - sourced the money. Currently Greece owes €320 billion ($360 billion), €240 billion of which is due to European bailouts. The country currently has a 177% debt-to-GDP ratio.

The Eurogroup today made an official statement on the situation, "We welcomed the progress that has been achieved so far. We note that the reorganisation and streamlining of working procedures has made an acceleration possible, and has contributed to a more substantial discussion. Once the institutions reach an agreement at staff level on the conclusion of the current review, the Eurogroup will decide on the possible disbursements of the funds outstanding under the current arrangement.”

For now, Greece has eased some fears of a complete liquidity crisis. The euro is currently trading below $1.12 level, undoubtedly affected by the financial situation. Eurogroup chairman Jeroen Dijsselbloem said there needs to be further specific agreements in place before Greece receives any further payments. Crisis averted, for now. But for Greece's economy there is a long way to go.

Greece - shutterstoc#E7F547Greece confirmed it has made its €450 million loan repayment to the IMF today, allaying some fears over the country’s ability to repay its current debts.

Euro zone partners have given the country six working days to improve a package of proposed reforms in order for the currency bloc to consider releasing more funds to the ailing state. Greece is hoping to secure a further €7.2 billion in loans to stave off possible bankruptcy.

As part of its attempts to get back to financial stability, the struggling country is now looking once again at selling state assets, according to Finance Minister Yanis Varoufakis. It has not been specified which tenders will go ahead, but it is believed that the government is looking for public private joint ventures.

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Europe - shutterstoc#D909E6Investors can expect “Greek-led volatility” for six months according global independent financial advisory organisations. Greece elected anti-austerity party Syriza in its general election at the weekend. Syriza has formed a coalition government with the rightwing anti-bailout Independent Greeks.

 “Investors can expect Greek-led market volatility for at least six months until a Syriza-led government is better understood,” said Tom Elliott, International Investment Strategist at deVere Group

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“The Euro will weaken – perhaps to parity with the dollar – over the next six months as investors seek 'safe havens' as other populist parties in the Eurozone are likely to rise in the opinion polls and echo Syriza with their demands to end austerity.

“The sliding Euro will further boost exporters who got a leg-up from last week's shock and awe quantitative easing package unveiled by the ECB.

“Indeed, one of the ironies of the Euro crisis is that the more that Greece looks likely to cause problems for the single currency, the more Germany and the core economies benefit from resulting Euro weakness.”

Mr. Elliott added: “Despite Europe's main share markets rising - after initial falls – and the Euro recovering somewhat today, the announcement that Prime Minister-elect Alexis Tsipras's main coalition partner is the centre-right Greek Independents will generate more uncertainty, leading to more market turbulence. This is largely because the move will hinder Syriza's negotiations with the Troika and, I suspect, hinder reform.

Mr Elliott concluded: “It is early days and the story is just beginning. However, what history teaches us is that what is happening in Greece politically will have far-reaching effects on the capital markets and will impact investor returns.

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“The changing political landscape in Greece, and across Europe, is presenting numerous risks and opportunities for investors globally. As such, the shifting dynamics must be monitored carefully to be able to benefit from these opportunities and to mitigate the avoidable risks.”

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