With the pain in Spain, now what’s next for the Eurozone?Follow @PwC_Scotland
While we may not be able to predict the outcomes of the Greek elections or Spanish banking restructuring, our latest report Now what’s next for the Eurozone? highlights the need for businesses to ensure they understand how the emerging restructuring may impact their business.
This updates our December 2011 report ‘What next for the Eurozone? – Possible scenarios for 2012’ and their implications for business.
Our December 2011 scenarios ranged from the optimistic - monetary expansion, fiscal transfers, restructuring leading to reasonable growth in 2012 - to more negative outcomes- further banking turmoil and a second credit crunch, Greece exiting the euro and the creation of a new smaller currency bloc.
Since December the most significant change affecting these is the downgrade to the most optimistic outcome, which assumed the authorities put in place a credible policy package in the first half of 2012. We now know that this has not happened, and so we have had to amend this scenario to reflect a more gradual and less concerted policy response from the authorities The other three scenarios are very much still in the running
Authored by PwC Economist William Zimmern, Now what’s next for the Eurozone? argues that the likelihood of Greece exiting the Eurozone has gone from an outside chance to a significant possibility, leaving the door open for other countries to do the same.
While this is only one of the four possible scenarios outlined in the report, Consulting partner Gerard Newman, has co-ordinated the firm’s response to the crisis and has been involved in contingency planning workshops for clients across the UK. He says:
“Companies’ degree of readiness varies. Although financial services businesses are already planning for further turmoil, sectors such as retail and Fast Moving Consumer Goods (FMCG) businesses are far less prepared”.
To read PwC’ latest assessment of the eurozone crisis, download a copy of Now what’s next for the Eurozone?
Email: Lynn Hunter
Tel: +44 (0)141 355 4015