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Euro-zone: Episode IV – A New Hope?

It was just like an intensely awkward film premier as Greek Prime Minister Antonis Samaras and German Chancellor Angela Merkel walked down the red carpet together. Sadly, there was no smouldering body language going on between the stars of Euro-zone: Episode IV – A New Hope?

Relations between the two leaders did at least appear reasonably cordial, and during the conference Merkel commented that she would take Samaras by the hand (metaphorically) and help him reach ‘the light at the end of the tunnel’.

Much of the Greek population have been directing resentful glares towards Germany, blaming the euro-zone heavy weight for the smaller nation’s austerity hardships. Conversely, there are those in the German government whose patience is wearing thin after watching Samaras’ coalition stumble from delay to delay over the last several weeks.

During today’s conference Merkel made clear her hopes of healing the current chasm between Greece and Germany. She stated: ‘What I want is to bring the two realities that have emerged back into one reality. Now it is the task of those who have political responsibility in Europe to bridge that gap. I want Greece to stay in the euro zone and that’s what I’m working for.’

Merkel also expressed the belief that Athens is making a concerted effort to solve the country’s problems. She commented ‘I am deeply convinced that the new government under the leadership of Prime Minister Samaras will do what it takes to solve the problem in Greece. This is a difficult path and Germany has always said it will support Greece on this path.’

When asked directly about derogatory comments made by a senior member of Merkel’s party Samaras’ response was to urge that people stop discussing the likelihood of a Grexit. Earlier in the week Volker Kaufer, the parliamentary caucus leaser of the Christian Democratic Union, was quoted as saying that if Greece were to bow out of the currency bloc it ‘would not be a problem for the euro’. Samaras stressed that such talk acts as a deterrent for investors, undermines the taxing requirements of the country’s international bailouts and further hinders Greek efforts at recovery.

When Merkel was asked about the same comments she dismissed them, returning with the assertion that ‘it’s the goal of the entire German government that Greece is part of the euro zone.’

In presenting a united front and announcing that Germany is indeed determined to provide the Greek government with the help it needs in taking steps towards healing economic wounds, Samaras and Merkel rebuffed those who have been critical of Greece’s reform efforts and those who have been urging a Grexit.

Regarding Greek Prime Minister Antonis Samaras’ request for a two year extension on the nation’s austerity programme Merkel’s response was slightly vague and non-committal. The Chancellor said ‘What Greece can expect [on this issue] is that we won’t make any premature judgements but will await the troika report.’

Samaras was keen to remind the press that Greece was asking for time, not money and issued a plea on behalf of the nation; ‘The recovery of the economy is of critical importance if we are to achieve our goals. What Greece needs is a chance at growth’.

Although both euro-zone leaders have openly spoken of the little progress made during the meeting Merkel did feel that they had made ‘a good beginning.’

Maybe, just maybe, with significant German commitment and support the situation in the euro zone could improve. If I was an optimist I might venture that by next year we could be seeing this pair in Episode V: The Euro Strikes Back. Sadly, I’m a realist.