It was never going to be a meeting of equals. The leader of the Eurozone’s strongest economy yesterday met the leader of its weakest. The more hysterical elements of the Greek media portrayed it as a distant empress sweeping in to chastise an under performing viceroy. Judging by the protests that greeting the German Chancellor on her six hour trip, the citizens of Athens were inclined to agree. Well over six thousand police were brought in to maintain order. Thirty thousands protested in Athens, while seven hundred rallied outside the German consulate in the northern city of Thessaloniki. Greek leaders for their part have been all too willing allow the Germans to be painted as villains. Far easier to claim the austerity is being imposed by heartless Teutons than by your lovable local MP.
Billed as a confidence building show of solidarity, Merkel discussed the wretched state of Greek finances with her counterpart, Prime Minister Samaras. Greece need confidence like Donald Trump needs a new hair stylist. Its economy is set to shrink an eye watering 6 percent this year, the fifth straight year of contraction. Next year it is estimated to shrink a further 3.8 percent. Its unemployment rate is the highest in the Eurozone, and it has warned it will run out of money by the end of November. It’s not the first time we’ve heard this warning, and to stave off default Athens needs its Eurozone partners to sign off on another €31 billion bailout.
To facilitate this, Greek leaders have until 18th October to implement a package of reforms, budget cuts and sell off of State owned assets. The targets were agreed with the Trokia as far back as last February but have no chance being met. The medicine is simply too bitter for Greeks to swallow and the predictions of a return to growth were laughably unrealistic. Samaras is pleading for more time. However time is money and Germans are suffering bailout fatigue. Even the usually mousey German Finance Minister has warned against bottomless bailout pits. Germans go to the polls next year and its politicians, though committed to the Euro project, are conscious that voters’ patience with their Hellenic partners is wearing thin.