Adrian Hamilton: There's still (a slim) hope for the eurozone yet

World View

Share

You wouldn't know it from the coverage over here, but the Eurozone crisis has actually eased quite a lot of late. Stock markets are up, even ours (although it is flattening out at present). The euro has risen on the foreign exchanges. Most importantly, the bond yields of Spanish and Italian sovereign debt – the great worry of a month ago – are down substantially.

"The calm before the storm," cry the pessimists. "Just wait until the markets and the politicians return from holiday and you'll see." Greece is in as much trouble meeting its deficit-cutting promises as ever. Angela Merkel, together with François Hollande, is due to meet with the Greek Prime Minister next week. The so-called "troika" – of France, Germany and the European Central Bank – are due to report in late September, early October. The odds are still on a Greek failure to meet its obligations and an enforced exit from the currency.

At the same time, there is nothing in the figures to suggest that Spain or Italy's debt problems are getting any the better, while Germany's willingness to increase the scale and scope of a bailout is, if anything, hardening. The bailout itself is up before the German court as unconstitutional. Senior members of Chancellor Merkel's own party are becoming more open in their criticism of her policies.

If you want to find the negatives for the Eurozone, as 90 per cent of the British seem to want, you don't have to peer round the back of the curtains and behind the sofas to come across them.

And yet there is an alternative scenario which should not be ignored. It is that the eurozone doesn't just muddle on but muddles through this crisis. Tory MPs and anti-Europeans this side of the Channel keep presenting the markets as if they were some form of Old Testament host come down to Earth to punish sinners. They're not.

Funds and investors have reasons for nervousness but they also have reasons to wish the eurozone to succeed. What they have wanted, and until recently lacked, is some sign that European leaders were willing to let the ECB act, as the Bank of England has in the UK and the Fed has in the US, and enter the market in a big enough way to support Spanish and Italian bonds.

That, they believe, is now the case after the statements from both the Bank and Germany last month. ECB plans are still to be fleshed out in positive action. But the intention is there and this, for the moment, has proved enough to stem the crisis.

It's not the grand leap to common eurobonds that France wants or the fiscal union which Germany seeks. But there isn't the political consensus for that. Despite that, it should be enough to keep the financial crisis boiling over. Which might then allow leaders to concentrate on the most pressing problem of all, which is the economic slowdown in the region.

Even Germany is now not immune, which gives some hope that Europe will begin to take the action needed to raise spending and allow a degree of reflation. A slim hope, perhaps, but not an impossible one.

Syria's Christians don't benefit from false declarations of havoc

To read the British newspapers, you would think that the Christians of Syria were against the uprising and that they were under extreme threat from insurgents bent on the Islamicisation of the country.

Not so. The truth, according to Monsignor Mario Zenari, the papal nuncio in Damascus, is that relations with the Syrian Free Army are good and, despite some aggression from fundamentalists in the country, Christians have so far experienced no threat from the rebels.

Reports by the Greek Patriarch and others that non-Muslims are under attack are, so it is said, being deliberately manipulated by the government to spread alarm.

One hopes they are not true. The experience of Christians in Iraq or Egypt has not been good. But then the Coptic-Muslim tensions in Egypt were there well before the revolution. Syria has long been a multi-religious and multi-ethnic country. There is a real danger of inter-ethnic violence. But it hardly helps to declare havoc when it hasn't occurred nor to fall for Assad's claim to be the last barrier to anarchy. That's always the last refuge of authoritarian regimes.

a.hamilton@independent.co.uk

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Property Negotiator - OTE £20,000+

£16000 - £25000 per annum: Recruitment Genius: This family owned, independent ...

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Day In a Page

Read Next
Wilbur, the pig who thinks he's a dog (Dom Joly)  

My hilarious pet pig Wilbur is more popular than I am — so I'll let him bring home the bacon

Dom Joly
 

Amazon's new 'payment by the page' policy will just result in longer but likely worse literature

Katy Guest
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'