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Who are the winners and losers
of the Euro decline?

The Greek Crisis

Well it looks as if the Greek Crisis has reached a hiatus for the summer. Elections in a number of Euro zone countries later in the year may reignite the Euro debate. Sometimes how deals are reached can give a signal of how things might change in the future. France and Italy initially showed more desire for a successful negotiation to keep the Greeks in the Euro Zone than Germany. This could be read as a sign that things are not going as well as might be expected in those countries.

In these types of events there are likely to be both winners and losers. So who are the potential winners and losers of the Greek crisis? Initial observation would suggest that the biggest loser could be the Euro itself. The currency has fallen by 18% to £0.712 against GBP since the start of August 2013.

Euro V Sterling 27/07/2015

Exeter Financial Advisor

Data source: Thompson Reuters EIKON

Europeans looking to buy British goods are going to be disappointed as they will have to pay more Euros for British made products. However, not all Europeans are sad. The main beneficiaries of a cheap Euro are those countries with a large export sector as their products will have become cheaper for people in Britain, China and the USA to buy without them having to reduce the wages they pay their employees.


There are no prizes for guessing which countries are most likely to benefit. Additionally, once they have made the sales in America or Britain they need to repatriate the profits denominated in Dollars or Sterling back to the Euro Zone. At the border, the foreign currency will have to be converted back into Euros at the new more favourable exchange rate increasing their company profits further.

So how can this help you?

Right now you can buy more in Euro land with your pounds than ever before. Two years ago a £100,000.00 would have given you €114,000.00 today you would receive €142,000.00

If you have been thinking about buying that holiday apartment in Euroland, now might be the time. I should add of course that the Euro could fall further in the future and your money may not be that secure in a country going through financial difficulties. Events in Greece and Cyprus are good indicators of the potential risks.

Good legal advice for the conveyance goes without saying, but also make sure you understand the inheritance tax rules in the country that you are buying your holiday home.

In some EU countries inheritance tax is applied between husband & wife and may be payable within six months of death.

We are seeing some evidence of people returning from abroad or selling their holiday home. So what do you do if you have got a suitcase full of Euros? You may not want to convert Euros into Sterling right now? You can’t really leave it in a Euro bank account earning little or no interest.

 Raymond James  is l able to offer Euro denominated investment accounts where you can invest in an unhedged Euro share class of your favourite collective funds or directly into Euro stocks if you want to keep the costs down. Over time, the Euro/Sterling cycle may turn to a point that you can exchange your Euro into Sterling at a more favourable rate.

If you have been affected by any of the points raised you can contact us via email or call direct.

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