A testing Thursday in the euro zone

By Alex Veeneman on June 6, 2012


German Chancellor Angela Merkel with Secretary of State Hillary Clinton in 2011.
(Photo courtesy of the federal government)

The events of later on Thursday in Germany and Spain are likely to phase for the moment the direction of the euro as an election in Greece due June 17 may determine if the country that joined the European Union may be leaving its single currency–the euro.

The German Chancellor Angela Merkel is to meet with British Prime Minister David Cameron Thursday in the German capital Berlin to discuss the euro zone crisis as concerns rise in the UK and elsewhere on the effects. The meeting comes as Spain plans to raise some finances amidst reports the country will seek a bail out from the European Union, which has been denied by the country’s economy minister. In addition, the European Central Bank met June 6 and kept its interest rate unchanged. President Obama spoke with Merkel, Cameron and Italian Prime Minister Mario Monti June 6 on the subject of the economy.

Yet, for the politicians in the euro zone, this Thursday will mean more than the euro as Spain works to sell its bonds and Cameron and Merkel meet for a discussion. The ECB’s president Mario Draghi said as the risks to the euro zone have increased, but noted some of the problems were from governments. In addition, amidst calls for a banking union, Germany is expressing concerns, with some German voters feeling reluctant to use money to bail out banks within the euro zone.

However, in the end, as the pressure on politicians in the euro zone is present, a lot of this pressure is placed on Merkel. She had a guiding relationship with the former president of France Nicolas Sarkozy, which were the guides in much of the negotiations surrounding austerity.

In an anti-austerity mood in much of the continent, Thursday’s events may mean a lot in the future of not just the euro, but for the politicians involved.

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