Following an inconclusive election, the situation in Greece is worsening by the day and continuing to ripple through Europe’s markets:
The euro fell and bank shares came under pressure in early trading as investors digested the implication of the Greek vote and the prospect of a challenge to Ms Merkel’s eurozone austerity after Socialist François Hollande won France’s election.Further instability in Greece is the focus of market concern with economists at Citi, the US bank, raising their odds on the country leaving the euro to up to 75 per cent.
Angela Merkel is sticking to her guns, refusing to give Greece any more money and reiterating her calls for Greece to swallow the austerity plan as currently constituted.Unfortunately for Greece, this may well be her last word on the matter. Merkel may be able to come to an agreement with incoming French President Hollande and with other leaders complaining about her harsh austerity programs, but she’s not likely to do so with the Greeks. From Germany’s perspective, Greece got Europe into this mess, and few German voters are prepared to sink any more money into propping up a country they view as lazy and deceitful. It’s not just Merkel: No elected Chancellor of Germany will be able to give the Greeks any more money.And since nobody but Germany has any money to give, that’s all there is to say about it.