FORT WAYNE, Ind. (WANE) – U.S. and global stock markets had a wild ride this week, mainly caused by the ongoing financial crisis in Greece. Sunday, there is a referendum that will decide the country’s financial future.
On July 1 at midnight, Greece became the first developed nation to fail to pay its debts. The country’s European bailout program also expired at the end of the day.That means Greece is now cut off from billions of Euros.
The Sunday referendum is for voters to decide if the country should accept demands by creditors in exchange for loans. Banks are closed until Monday. The Bank of England has warned that Britain’s financial stability has gotten worse because of the crisis. Because of the instability, Greece is likely to leave the Euro and possibly the European Union.
Click here to read more on the timeline of the crisis.
Local financial expert and Certified Financial Planner for Oak Partners in Auburn Mark VandeVelde stopped by First News Sunday to talk about the newest developments in the Greece situation and how it could impact the U.S.
“When we talk about the impact on the global economy, I think it’s important that we put that into some perspective. The size of the Greek economy measured by GDP last year was about $242 billion. As a comparison, the state of Indiana alone was about $328 billion in GDP. So, it’s about 25 percent larger than Greece. In fact, if Greece were a U.S. state, the size of their economy would rank about 25th in U.S. states. So, when we talk about the impact in terms of the hard numbers, it’s really not that great,” VandeVelde said.
VandeVelde also said while the present market may have its ups and downs from the crisis, the future still looks good for the U.S. economy.
“There’s going to be a lot of short term volatility until this is resolved. Really, once it’s over, things will get back to normal. The market hates uncertainty, but once that uncertainty is lifted, then things go back to normal. We’re going to be fine. The great news is the U.S. economy is growing, and we’re heading in the right direction. We also know that volatility creates opportunity, so I do think working with a trusted advisor to find some of that opportunity is a good thing,” VandeVelde said.
To learn more about Oak Partners, visit the website by clicking here or calling 260-927-0226.