European leaders’ determination to keep Greece in the euro area will be tested this week as Prime Minister Antonis Samaras struggles to secure political support for measures to assure the country’s financial lifeline.
Samaras pledged yesterday that the raft of wage and pension cuts in the latest austerity package will be the last and that Greek society won’t tolerate any more, according to comments made to lawmakers of his New Democracy party. The first parliamentary vote in Athens may come as early as Nov. 7.
Spanish borrowing costs have eased from record levels in July after ECB President Mario Draghi unveiled a plan to buy unlimited euro-area sovereign debt. While that firewall will probably prevent further upheaval, “the next two weeks are strewn with risks that are worth watching,” Schmieding said.