Economic Outlook: Merkel visits Athens

By ANTHONY HALL, United Press International  |  Oct. 10, 2012 at 9:07 AM
share with facebook
share with twitter
| License Photo

Years ago, Saturday Night Live featured a skit in which, in all innocence, a few cast members discussed some remarkably stupid ideas.

One cast member said he was pouring thousands of dollars into fixing up a home that, it turns out, he was only renting. Another says, "now that the affair is over, I figure I would tell my wife."

After each painfully innocent remark, the screen would flash a message to the audience, which read: "Bad Idea."

Here's a current update to that concept: Germany Chancellor Angela Merkel made a trip this week to Athens, Greece.

Bad idea.

Predictably, thousands took to the streets with unruly demonstrations to greet the leader most often associated with forcing austerity budgeting on Greece in order for the country to qualify for international aid.

Merkel has received enough grief in Germany for backing the rescue effort that requires Germany, as the eurozone's largest economy, to pay by far the largest share. If this has not made her many friends in Berlin, how did she think a visit to Athens might go over?

In recent months, Merkel has become at least clearer about her commitment to keeping Greece in the 17-nation eurozone, even to the point of asking members of her own party to back off from making disparaging comments about helping a country Merkel's finance Minister Wolfgang Schauble has called a "bottomless pit."

It would not be much of a stretch to imagine the man on the street in Athens viewing Germany as providing not only the wounds, but the salt as well.

All might be different, of course, if there were immediate signs of improvement in Greece, but the economy is smoldering and the government is still looking for billions in spending cuts.

Merkel's renewed commitment to Greece comes at a time in which the German central bank took a stand opposing the European Central Bank's new program of buying short term government bonds from countries struggling to get out of debt – a program that also relies on strict budgeting requirements.

More recently, Merkel has made repeated references to a "light at the end of the tunnel," in Greece's struggle to meet terms of the international loans. She may believe that will buy her some popularity points in the country that is now deeply mired in a prolonged recession.

There's fantasy football. This is fantasy politics. In Athens Tuesday, Merkel said, "Germany wants to be a good partner and a real friend," to Greece.

In the meantime, the street demonstrations, Merkel's unofficial welcoming committee, were erupting in violence.

In international markets Wednesday, the Nikkei 225 index in Japan dropped 1.98 percent, while the Shanghai composite index in China rose 0.22 percent. The Hang Seng index in Hong Kong was flat, dropping 0.08 percent, while the Sensex in India gave up 0.86 percent.

The S&P/ASX 200 in Australia fell 0.32 percent.

In midday trading in Europe, the FTSE 100 index in Britain dropped 0.38 percent, while the DAX 30 in Germany lost 0.07 percent. The CAC 40 in France slipped 0.12 percent, while the Stoxx Europe 600 shed 0.29 percent.

Related UPI Stories
Trending Stories