Euro crisis less and less important

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The sentix Euro Breakup Index (EBI) for December decreases from 32.7% to 25.0%. This is the EBI's lowest level since its inception in June 2012. Only one out of four investors now thinks that within the next twelve months at least one country will leave the euro zone. The EBI had reached a high in June 2012 with 73.3%. The current survey was conducted from December 27th to December 29th, 2012. 778 investors were polled.

Candidate number one for a euro exit remains Greece. However, in December it was only 22.5% of all investors surveyed who predicted a so-called "Grexit" within the next year (after 30.1% in November). This amounts to a decrease by 7.6 points. The Greek's EBI level is now the lowest since the poll was introduced last June. Its fall is the steepest by any of the country indices. The successful debt buyback at the beginning of December and the continuing easing of financial markets tensions over the past weeks should have helped to make these developments happen.

In addition, the breakup indices for most of the other periphery countries continued their downward trend in December. For Portugal the EBI falls to 2.5%, for Spain to 2.1%. The only exception is Italy. Here, against the background of rumours surrounding a comeback of Silvio Berlusconi, the EBI rises a little, but still remains at a relatively low level of 2.0%. These readings show that investors do not expect a sudden euro end for the above mentioned countries anymore. Nevertheless, government bonds of the euro zone periphery still trade with remarkable premiums in relation to German Bunds. Furthermore, the yield differentials among those countries are not justified by their EBIs anymore. That means that there is still room for much tighter spreads. Having said that, the relative position of Cyprus has deteriorated in December: The EBI for Cyprus barely changes and remains the second highest at 9.6%.

Over the last months, there were also two countries from the euro zone's core which figured in the higher ranks of candidates for a euro area leave, Finland and Germany. Obviously, for some investors their economies appear too strong for the rest of the euro members. But with EBIs of 3.3% for Finland and only 2.1% for Germany these indices have now receded to uncritical levels, too.

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