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Periphery a pesky problem for Draghi?

Friday, November 20, 2015 - 01:40

Greece votes through its latest reform programme, but a shrinking government majority there and political upheaval in Portugal spell growing trouble for the Eurozone's fragile periphery economies. Sara Hemrajani reports.

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"No home in the hand of a banker" - The message from demonstrators in Athens as Greece signs off on new financial measures. Inside parliament, lawmakers voted on a reform bill to unlock further bailout funds from the country's international lenders. But the mood was far from victorious. Prime Minister Alexis Tsipras is struggling to keep his fragile coalition intact. His majority has now shrunk to just two seats, and that's as the opposition are stepping up their anti-austerity rhetoric. SOUNDBITE: Vangelis Meimarakis, New Democracy Party leader, saying (Greek): "New taxes are on their way, new taxes for farmers, painful pension cuts, and we believe the darkest winter is coming, the winter of the neoliberal left, the left that doesn't know what it is doing or where it is going." The strain is also showing in another euro zone state. After Portugal's centre-right government was ousted, Lisbon is weighing up the prospect of a leftist alliance. That could see a push back against the policies of Brussels and Berlin. Still, some are confident the periphery economies can weather the storm. Adam Chester is from Lloyds Bank. SOUNDBITE: Adam Chester, head of economic research, Lloyds Bank Commercial Banking, saying (English): "We're cautiously optimistic that we're not going to get a repeat of the sort of crises that we'd seen in recent years. I mean Spanish growth, for example, is motoring away, it's sort of 3.5%. Ireland of course is out of the crisis and it's recovering. And I think if we can get through this little wobble in political issues in Portugal and Spain, then hopefully we can move forward and then improve in 2016." Speaking in Frankfurt on Friday, Mario Draghi said the ECB is ready to act quickly to boost the euro zone, offering a strong hint that a round of stimulus could be on the cards.

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Periphery a pesky problem for Draghi?

Friday, November 20, 2015 - 01:40