Slight Optimism and Strong Scepticism

Today in FT Wolfgang Muenchau claims that ‘A Eurozone banking crisis left unresolved’. (FT, Monday September 13, 2010). He concludes: ‘Two years after Lehman’s collapse, the fragility of the European banking sector is still an issue. I would bet we are still talking about it in five years. That, in turn, means the financial crisis will go on and on, at least in the eurozone’.

That doesn’t sound very promising for Greece at a time when George Papakonstantinou -the finance minister- is arranging a delegation with officials from EU, IMF and ECB to meet investors in Paris, London and Frankfurt. Greece needs to convince potential investors that confidence in the country should be revived. The bail-out package ends in 2013 and there is not enough time. Although the fiscal adjustment programme is going well perhaps further structural programmes are still needed. Just one week ago the Greek PM, George Papandreou, reshuffled his cabinet. Old Emperor with new Clothes? I do not know. But, it seems, not only to me, that he is still determined to try hard. Time will tell….

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