Are you in the zone?

Flood, quake or Euro? All seemingly have dangerous, turbulent and life-changing features.

I’m not a physicist but I seem to remember that Newton’s third law tells us that for every action there is an equal and opposite reaction. Equally fundamental is that high ‘potential’ energy built in one part of the system will, if given the chance, often quite violently transfer to a lower energy point thereby restoring the equilibrium. We often exploit this natural energy dissipation to help fuel our businesses. Left unmanaged and unanticipated it is truly destructive.

Scientists around the world have, over time, developed instruments to monitor and measure the real world effects and hopefully prepare the population with suitable emergency plans and early warning systems to avoid disaster. They have learnt that it is impossible to avoid ‘acts of god’; however, compounding man-made disasters can be minimised through intelligent regulation, meticulous design and build and thorough test checking.

What would Newton conclude about the Eurozone predicament and what advice would he give to the Greek electorate as they go to the polls on Sunday? Being an Englishman, would he just politely defer to Aristotle or Archimedes for in-market advice?

I’m afraid I’m clean out of advice. Critical pressure in the Eurozone needs to be relieved. Debts for debt solutions like that seen in the announced ‘TBA’ Spanish bailout seem wide of the mark. Certainly the market thinks so. I’m sure it was well intended, and critically important, but has it just added even more uncertainty to a politically charged period in the run up to the Greek elections?

Looks like we need to crack out another packet of LTRO to ease us through....but is this just another palliative? Surely we need both capital and a political solution? One wonders how big a problem has to get before political consensus emerges. All the best to the Greek citizens this weekend as they grapple with their democratic rights; something they’ve been honing for the best part of 1500 years.

Our top 3 resources to assist you with your contingency planning:

1. Euro contingency planning briefing paper
Our briefing paper looks at the risks and problems that might appear for non-financial companies and outlines possible mitigating actions. Assessing your exposure and risks is the best way to prepare.

2. ACT question time event: Eurozone in crisis
Are we seeing the end of the Eurozone? And is your business prepared for this outcome? Our panel of business and financial leaders will share their views on the Eurozone crisis and debate the risks and probabilities in light of the very latest developments.
2 July, 17.30 – 20.00, Exchange House, London. Free to attend.

3. Contingency planning for a downturn in the economy: a treasurer’s checklist
Your go-to guide for how to prepare for, and cope with, a downturn in the economy. On the other hand it also includes tips on how to benefit from the recovery.

By Colin Tyler