The Eurogroup countries on Thursday evening agreed a rescue package for Greece that entails a mixture of bilateral loans and International Monetary Fund help. According to the press the plan demonstrates Europe’s will to overcome the crisis as a group, but also calls the monetary union into question.
When we look back five years from now, will we see this week as marking a turning point in the short, but far from uneventful, ten year history of Europe?s common currency? Certainly recent comments by the deputy governor of the People?s Bank of China have made evident what was already implicit: the dependence of EU sovereign debt on sentiment in global markets, especially in Asia and the Americas. Simon Derrick, chief currency strategist at Bank of New York Mellon even went so far as to say the trauma of recent days might well signal the point that we stop talking about a ?Greek debt crisis? and start talking about a ?Eurozone structural crisis? . And while Herman Van Rompuy, president of the European Council, was telling us on the one hand that the eurozone will never let Greece fail, Jane Foley, research director at Forex.com busied herself explaining, on the other, that any involvement of the International Monetary Fund in helping Greece to stabilise its fiscal position only heightens the risk that the country might one day end up leaving the eurozone. So just where are we at this point?
from FP Passport by Joshua Keating
Greece?s recent fiscal travails have, slightly unexpectedly, thrown the spotlight on Germany?s current-account surplus. In mid-March, France?s finance minister, Christine Lagarde, urged Germany to do more to boost domestic demand ? a call echoed by the European Commission?s president, José Manuel Barroso. The German government and media are bemused and indignant. How can it be, they ask, that corruption and profligacy in Greece has turned in to a trial of German discipline and rectitude? Anyway, what right do French politicians ? and, for that matter, Anglo-Saxon commentators ? have to lecture Germany? Wouldn?t they be better advised attending to their own countries? manifold economic problems?
At the Financing Europe?s Energy Needs conference on Wednesday, which, I might add (and completely impartially), was a huge success, speaker Russel Mills (Global Director of Energy & Climate Change Policy for Dow Chemicals) described the climate change mission as a ?long marathon? and profoundly questioned, ?how do we win this marathon??