At last, after months of discussions and speculation, the German Federal Constitutional Court has given the green light towards the creation of the European Stability Fund (ESM). This means that the Fund can give up to €500 billion of loans to Member-States in need. In addition to Draghi's announced bond-buying program, this is expected to bring a new era of calm in the markets. However, what is more important is that they are giving out the signal that both the EU and the common currency are here to stay.
In essence, this would mean that all rumors and speculation concerning the fall of the euro, the Union, a sovereign exit or bankruptcy are unfounded. Thus, after these are refuted, stability and calmness is expected to appear on the markets, in contrast to the panic which lasted for almost a year. Nevertheless, not to be forgotten is that individual nations are still struggling to survive
, and for some (Cyprus, Italy and Spain), the worst is yet to come.
, and for some (Cyprus, Italy and Spain), the worst is yet to come.
Tomorrow, in Nicosia, Cyprus, the Greek Prime Minister, Antonis Samaras, is expected to announce the new austerity measures at the Eurozone finance ministers meeting. Although the flow of cash to Greece is not expected to halt as none of the decision-makers has ever stated such an interest, the Troikans will issue their next report in October where the Greek government is expected to come short of its targets. In the same meeting the situation in Spain is expected to be discussed. Even though a package of €100 billion has been made available
