Content about Eurozone

European stock markets today, Tuesday 22 May, opened in the green and remained there until well into the afternoon.

In an unexpected way, the issue of a bank run in the Eurozone was raised in the G8 summit at the weekend, with remarks ranging from scaremongering to 'advices', about how the new European Stability Mechanism (ESM) should act as lender of last resort for Eurozone's banks.

Fortunately Greece is the only Eurozone member that faces existential problems to stay or leave the euro area. Ireland and Portugal got last week the seal of 'good direction' by both the Ecofin and the Eurogroup. The two are meeting the programme targets to cut down deficits. As for Madrid, the Rajoy government got the approval of Brussels for its bank recapitalisation plan. Last but not least Holland even without a government manage to put together a parliamentary agreement to cut down fiscal deficits.   But lets take one thing at a time.

Even from a business point of view, the spectacle of the newly appointed French President François Hollande running to Berlin, practically minutes after his official inauguration, was by itself a strong message; France is not to question the German prerogative in the European Union and of course in the Eurozone.

With Alexis Tsipras, the young leader of Greek left wing party SYRIZA, predicted to win the next election, insisting on his electoral rhetoric that his country should stop paying its creditors if the Eurozone cuts Greece off the agreed soft loans life line, it was not a surprise that stock markets in Europe and New York keep losing ground, and the G8 Summit which meets on 18 and 19 May in Camp David has Greece as its main item on the agenda.

European Parliament president Martin Schulz, who has expressed himself in favour of Greece's stay in the eurozone, is visiting the nation's capital on 18 May.

From Athens, via his iPhone, Schulz tweeted: "In Europe we talk a lot about Greece, but not enough with the Greeks. This is why I'm in Athens today-to talk with and listen to the Greeks." 

There are converging estimates that a potential Greece's exit from the Eurozone may cost up to one trillion. A large part of it will be born by this country itself. It will income losses over a number of years, due to an unprecedented recession and uncontrollable inflation. The largest part of it however will be born by the other weak Eurozone countries. There will be also huge losses for central countries like France, Germany and Holland due to the exposure of their lenders to the Greek banking system.

Before flying out to the G8 Summit at Camp David and the NATO Sumit in Washington, D.C., European Commission President José Manuel Barroso sent out a clear message to Greece: swim together or sink alone.

An agreement on the Second Economic Adjustment Programme and the debt reduction agreement has been a consistent focus of the Commission in order to to concentrate efforts on growth and jobs througout Europe, but more specifically in the debt-ridden Greece.

As talk of a Greek exit grows and yet another solution to the Eurozone crisis fails, the Council have sent out an urgent call for more expertise: "Council of the European Union is looking for one or more experienced Administrators (AD7) to temporarily (at least two years)."

There is growing evidence that the Eurozone is about to change its course of severe austerity inspired by the German Christian democrats (CDU) of Angela Merkel, because neither the countries which apply those highly unpopular measures like Greece and Italy, nor the German voters themselves seem to be happy with it.