It seems a bit of a cliche to say that this week will be a ‘crunch week’ for the Eurozone. But, in truth, the week ahead will determine the shape of the 17-nation single currency bloc.
There have been other such vaunted ‘crunch weeks’ before, but the crisis which has bedevilled the Eurozone for the past 30 months has lingered, casting a pall on Europe’s economy, spreading debt contagion, sowing seeds of uncertainty.
But this time around, there are signs that this will be a different ‘crunch week’ — one that may see European leaders turn a corner on a confusing and destabilising chapter in the common-currency bloc and beyond.
On Thursday, German Chancellor Angela Merkel will meet French President Francois Hollande, and a day later, Greek Prime Minister Antonis Samaras. It is there that the final terms of Athens’ second bailout will be set. It is put up or shut up time for Athens.
This week will determine too if Spain and or Italy need bailouts as their bonds trade dangerously close to the point where Madrid and Rome can no longer service their crushing debt levels.
With the European Central Bank willing to buy sovereign bonds from troubled Eurozone nations — but only on strict conditions and if governments act first by buying debt from Europe’s bailout fund — there is a bottom at the end of this dark debt abyss. Unless Eurozone leaders manage to find a way not to act decisively ...
