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

World View
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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.