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The Euro made solid gains on many of the other major currencies around the world today, primarily on the back of increased confidence within Germany. Wolfgang Schaeuble, the German Finance Minister, confirmed that there would be a “working group” set up by the two financial pillars of the Eurozone in the coming months. The group will proactively look to ensure the Euro does not run into further trouble as the three year long crisis continues to simmer.
German Chancellor Angela Merkel spent most of last week in the spotlight as she met with Greek Prime Minister Antonis Samaras for crunch talks in which he was expected to ask for more time to meet the goals set out as part of their bailout.
After the meeting Merkel seemed to have renewed faith in the Greek Premier and his party’s endeavours to take control of their economy. The Chancellor has even been rather passive-aggressive with a leader from her own coalition who denounced Greece and suggested they would not be part of the single currency in 12 months time.
Merkel asked all politicians, inside of Germany and out, to “weigh their words” as speculation will not help the Greeks in their current plight – and Germany will stand by them. Merkel insisted that she had seen enough positives from Greece since Samaras took power less than three months ago to be confident that the newly elected party were undertaking “serious efforts” to get themselves back in shape.
The Eurozone is now approaching what will possibly be the most important month of the crisis so far, with the European Central Bank looking to finally take the action they have been promising all summer by forming a bond purchasing programme. The ECB hopes that this will relieve pressure on the Eurozone and provide the necessary stimulus to drive growth up.
The only really big announcement that is expected to come out of Germany now is the result of the current court hearing which is currently taking place to decide just how big their bailout pot will be. Jens Weidmann, a well respected banker within Germany, said in court that the ECB needs to tread carefully as continuing with this policy does not punish those at fault for the current crisis, but rather those who keep their own house in order. Mr Weidmann also suggested that “monetary financing of budgets can become addictive like a drug”, a statement Chancellor Merkel has welcomed and praised him for pushing for a changes in policy.
However she did also say that now is a time for unity and keeping Greece and other struggling in the Eurozone by whatever means necessary must be the primary focus of everyone involved. Merkel said that the Euro was not just a financial union but also the result of a political one and under that union the region had seen “decades of peace” – something which everyone hopes remains the case.