Good afternoon, a number of media outlets have asked me for an update on the situation in Greece and what its implications may be for Australia.
Little has changed since this morning. The Greek community has voted and now the Greek authorities and their European creditors are assessing what to and where to from here.
From Australia’s point of view, we have relatively modest exposure in economic and financial terms to Greece. We are carefully monitoring the situation and we are fortunate in our own circumstances; we have a very strong, well-capitalised banking sector.
We have a very credible path to budget surplus, we also have a strong economy with many key elements in it and we are not anticipating any issues of great concern now or in the near future.
We are however, looking very carefully at the developments in Europe.
Finance Ministers from Europe are engaging in a discussion with Greek authorities. We expect tomorrow will be a meeting of Greek Finance Ministers; I should say a meeting of European Finance Ministers.
The Greek Government is contemplating an alternative proposal and you may have seen very recent reports that the current Finance Minister has resigned from that post.
The message for Australia is your government is looking very carefully at what is happening in Greece. As are our regulators and we are liaising closely with our international colleagues.
Australia’s circumstances are strong. Our exposure in financial and economic terms is modest. Our banking system is robust and well capitalised. We have strengths in our economy and we also are on a credible pathway to budget surplus.
That is the update. We should know more as the European and Greek community reveal more from their discussions in coming days. That is the situation as it relates to Australia.
Are you concerned about the No vote?
It is not a question of concern or not concerned. The vote that the Greek community have taken is a decision that they have made.
It reflected a three in five response to the proposition on the table that European creditors had put forward to continue to provide finance to the Greek economy and the Greek community.
It is an important opportunity for those Greek creditors, the Greek community and the European creditors to re-engage and discuss where to from here.
For Australia, our direct economic and financial exposure is modest. We are fortunate to have strong banking institutions that are well capitalised. We have many economic strengths that are to our credit and we also have a credible pathway back to surplus.
We will continue to monitor the situation carefully and as the European community and Greek community work through the issues before both, we will learn more as greater clarity arises.
The Aussie dollar fell to a six-year low and the market was down 1.5% about 45 minutes ago, are you fearing a more negative reaction here?
What people are working through are many unknowns at this time. There have been some conflicting movements in economic indicators and on markets but there could be a range of factors that are influencing that.
There has been much interest in what is happening in China. Chinese authorities have confidently intervened in circumstances in China and that may also have had an impact.
It is a little early to identify what has caused movements. We are monitoring the situation carefully but at the moment there are many unknowns in terms of what the Greek Government will do next and what the European creditors are looking to the Greek Government to do next.
We will know more about that in coming days. As we are more informed so will our markets be.
Are you concerned about the massive losses on the Chinese share market in the last few weeks and the possible fallout for Australia?
There has been extraordinary strength in the Chinese share market and you saw that causing some concern for Chinese regulators.
Chinese authorities have intervened. There has been some stabilisation and some recovery and that represents just one of a number of moving parts that you see in the global economy at this time.
That is why our Treasury officials, the Reserve Bank, the prudential regulators, all of the economic regulatory architecture in Australia is monitoring the situation carefully: Not only in Greece, but in other global terms, where there are some moving parts that are all having an impact on markets here and abroad.
That is why we are closely examining the situation, looking for greater clarity as those processes work their way through and certainly looking to Europe to see how it will respond with the vote in Greece from the weekend.
Thanks very much.