A warning from Merkel and Hollande

Together with the stagnation of the French economy, the slowdown in Germany — where there is a chance of a mild recession — makes it even more necessary for there to be a stabilization and a deepening of the Monetary Union, as well as growth policies on a European scale. We are no longer faced with a euro zone wherein the southern countries are unable to shake off their economic paralysis, while the north remains industrious. We are now all in the same boat, and our salvation must be collective.

In these circumstances, German Chancellor Angela Merkel and French President François Hollande had dinner on Thursday night in Berlin. Despite their previous distance on a number of issues, they strived to present an image of unity, marking the beginning of a complicated and crucial chapter in the history of Europe. Once more, above all of the other problems that already exist in the euro zone, the issue of Greece is at the top of the agenda. After five years of recession, its government is asking for some breathing room — a bit more time to deal with all of the austerity measures that have been demanded of it, the ones that the conservative Antonis Samarás promised in order to win the elections. It’s possible that in October, after the troika presents its report on the degree to which Greece is complying with these measures, the room for maneuver that it is permitted will be increased. But for now, Merkel and Hollande are insisting that Greece must stick to all of its commitments, in particular the structural reforms that it has put off time and time again. The head of the Eurogroup, Jean-Claude Juncker, has gone even further than that, saying that we are looking at “the last chance” for Greece. Although it would mean opening Pandora’s box, many governments appear to be preparing for the possible exit of Greece from the euro — something that is not in Spain’s interest.

This uncertainty is once again weighing on the markets, sending Spain’s borrowing costs shooting up once more. The European Central Bank must urgently do what it has hinted it is going to do to calm the debt markets, despite the resistance of the German government. But not all of this has to come from outside. Spain needs a plan to get out of the crisis. Relying simply on a bailout and foreign demand is not enough, given that the export markets are beginning to suffer serious problems. When the next act appears to be close, joint efforts are needed in order to save both the euro and Europe’s economies. The electoral calendars in Germany, Holland and Austria are not exactly opportune, but this is what the next chapter in this ongoing crisis is going to be all about.