The Greek situation has escalated over the past couple weeks, causing investors some concerns. We want to briefly address those concerns and provide our insight into the situation.

First, how’d we get here?

Greece has been in the headlines for a number of years as it teetered on the edge of financial collapse. After the 2009 recession, a number of European countries corrected economic challenges by taking the much talked about "austerity measures" which included trimming government spending, reducing bloated pension entitlements, and reforming many areas of the public sector. Greece has made little progress in those areas and, since 2010; their economy has contracted by 26%.

Fast forward to 2015 and many of the countries that pared back spending are now showing signs of sustained economic growth.

Meanwhile, Greece is still struggling with major financial threats. In January, austerity-weary voters elected a government that promised not to make further changes, which meant they did not cut retirement benefits, trim public spending or reduce the size of the public sector. Five months after that election, Greece defaulted on a loan to the International Monetary Fund (IMF) and now there is a high probability they will default on a €3.5 billion payment to the European Central Bank due July 20th.

The possibilities of Greek defaults have been making headlines for over five years.

During that period, many investors reduced (or completely eliminated) risk exposure to Greece. Additionally, Greece represents only 2% of Euro area GDP. With a GDP approximately the size of Alabama's, they are not large enough to qualify as major catalyst for a market crash. The fear of contagion is limited as well. Initially there were fears that European officials would back down and give Greece some sort of special deal which would in turn lead to other countries (such as Portugal, Spain, or Italy) demanding better terms for their loans as well. Instead, European officials have maintained a hardline stance with Greece, suggesting they are in no mood to make concessions on loans to Greece (or anyone else for that matter).

Again, MIRUS Financial Partners is closely monitoring this situation as it unfolds. However, we do believe any adverse market impacts will be limited and short term in nature. If you have specific questions about how this news affects your portfolio, please contact Mark Vergenes at mark@mirusfinancialpartners.com

MIRUS Financial Partners
110 E. King St.
Lancaster, PA 17602
717-509-4521
mark@mirusfinancialpartners.com
http://www.mirusfinancialpartners.com

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Mark A. Vergenes is President of MIRUS Financial Partners, 110 E. King St., Lancaster. Investment Advisor Representative offering securities and advisory services offered through Cetera Advisor Networks LLC., member FINRA/SIPC. Cetera is under separate ownership from any other named entity. MIRUS Financial Partners nor Cetera Advisor Networks LLC. give tax or legal advice.