Balance between pessimists and optimists

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The sentix Euro-Break-up Index (EBI) for September falls again markedly. This time it decreases by ten percentage points. The EBI now stands at 51.9 %. That means that only about half of those 897 investors who took part in the latest sentix survey expect at least one country to leave the euro zone within the next twelve months. The survey was conducted from September 27th to September 29th.

Between the last poll at the end of August and the current one, two events should have dampened sorrows in particular: firstly, the European Central Bank's concretised plans to buy government bonds of ailing countries, and secondly, the decision by the German constitutional court to allow the European Stability Mechanism (ESM) to come into life.

Furthermore, there were positive news from outside the euro zone: The US-Fed has decided on another round of quantitative easing, the Bank of Japan has committed itself to further asset purchases, and China – which, in contrast to the Western world, is still in a comfortable fiscal position – has announced new infrastructure projects in order to stimulate its economy.

This gives the impression that, once again, the international community is jointly trying to fight economic sluggishness, if not the euro crisis itself. And obviously they have managed to calm down investors. That is indicated not only by the EBI headline, but also by its subindices at the country level: In September, even less than half of the respondents saw Greece leaving the euro within the next twelve months. The probability of a so-called "Grexit" has fallen to 48.8 % from 59.6 %. That means: Of the 51.9 % of all survey participants who see the euro breaking up, 94.0 % say it will be Greece giving up the common currency. But even this value has come down from 96.4 % in August.

In relative terms, only the positions of Cyprus and Portugal have deteriorated. Against the overall trend, a slightly larger part of euro skeptics now expects a farewell from the common currency for those two countries. But as the percentage of euro skeptics has decreased in September, the exit probabilities have also fallen – to 13.6 % (from 16.1 %) for Cyprus, and to 6.0 % (from 6.9 %) for Portugal. Spain's indicator has even eased to 4.9 % (from 7.0 %).

Among the core countries, it was Finland that had surprised in August with a sharp rise in its index. Also, Germany was seen as an exit candidate by many investors until recently. But against the background of relative calm from euro critical politicians the Finnish index drops by 7.5 percentage points in September. The German index falls to 4.1 % from 5.7 %.

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