The political economy in the Eurozone is moving towards a resolution of the Greek debt crisis and the Euro will make it through, Wolfgang Münchau writes in the Financial Times.
Summary: A Greek default had been predicted on account of a widening dispute between Germany and the ECB, and the near breakdown of the Greek government. Greek PM George Pandreaou has reshuffled his cabinet and now German chancellor Angela Merkel has said she wants to end the Greek crisis. Merkel is concerned about Germany’s exposure to Greek debt and if the country defaults, she is likely to go down in history as the woman responsible for the break-up of the EU. Despite German finance minister Wolfgang Schäuble’s rejection of a Vienna-style initiative last week, Merkel has warmed to the idea. The EU and IMF package are insufficient however and Greece can expect a third package sometime next year.
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