As the next round of talks get underway, it seems that Angela Merkel has to play the devil’s advocate in front of more than one crowd. The German Chancellor says she is willing to aid Greece in every way possible even though her stance has not been supported by her own people. Her recent visit to Greece attracted fresh round of rioting in the city of Athens. The anger that is being shown is due to the strict and rigid measures that have been brought up in the international debate on the eurozone crisis, spearheaded by leaders like Merkel and Hollande.
The austerity measures that are being asked from the people are seen as a harsh reality that is contended against by Greece and slowly the effect is also creeping into Spain which is suffering from 20% unemployment. However, it has to be realised by the people as well that they have to sacrifice a little in order to be able to sustain the European Union in the long run. In order to survive, countries like Greece and Spain have to take heed and wake up. Spain seems to be headed down the same route that Greece did with the latest being the downgrade to nearly junk credit rating by S&P.
At this point in time, Greece should look to all its supporters and keep them close in its time of need. Merkel is one of those supporters who have said that she would see the EU sustain into the future when others have called for its disbanding. Merkel’s visit is to discuss the plan, presented by Mario Draghi – head of the ECB, made up of bond purchase and bank capitalisation to be carried out by the ECB in order to inject some much needed liquidity into the system. The new tranche of bailout funding has been proposed and it seems it might be approved and secured by as early as November on the condition that Greece will carry forward the austerity measures already in place and further tighten its belt amid criticism that it is not doing enough.
They feel that Greece has missed most of its key targets and that this round of negotiations should agree on better measures. Merkel, during her visit on Tuesday, did encourage reforms put in place by Greece which shows that the efforts are being appreciated but there is still a long way to go before things become better for the distressed countries in the eurozone. In the financial markets, the new round of negotiations between different European leaders is seen with scepticism and the new wave of uncertainty is making the markets go squeamish.
Investors are taking note of the situation and are bearish on the fact that this would be more of the same old. Nothing drastic is expected from the negotiations, however, the signals that have been given till now should turn the markets into a positive direction once the negotiations end. It is not a quick fix solution that has to be implemented. Still, the patience of the investors is running short now as the crisis keeps dragging on further. They would rather like to see a quick end to the situation rather than be unsure about the drawn out process of bureaucracy and politics that is further complicating the crisis.