Euro crisis: “This time it’s really, really serious…”

European Commission President José Manuel Barroso is off to Greece for “a regular meeting” with Prime Minister Antonis Samaras.  His first visit to Athens since June 2009.  Meanwhile, the rising cost of Spanish and Italian Government borrowing has prompted a declaration of intent from European Central Bank president Mario Draghi.

“To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate,” Mr Draghi said in a speech at the Global Investment Conference in London today.

“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” he said, adding: “believe me, it will be enough.”

[Whatever that means – Ed]  And whether or not you believe him is another matter…

In the Irish Times Arthur Beesley suggests “the final chapter of the saga is about to unfold”.

All of this feeds into a markedly downbeat atmosphere in Brussels over the prospects for the country. Amongst weary officials involved in the rescue effort, the thinking goes that Greece has but one last shot this summer to prove to its sponsors that it can implement the astringent reform programme. At the same time, it is readily acknowledged in private that quite a few finance ministries elsewhere in the euro zone have already given up hope of the country ever coming good within the single currency.

This helps explain the present unease, although the holiday exodus leaves an empty Brussels feeling something like a ghost city. An assortment of reports cite increased talk about a “Grexit” from the euro. Reports also refer to the International Monetary Fund’s supposed refusal to provide any more money to the country and to another round of debt restructuring.

Although soothing words from official sources insist nothing is preordained in advance of the troika’s ultimate findings, it all points to high tension. The Commission’s spokesman would not say what message Barroso will deliver to Samaras. Still, close observers of the Greek saga expect the prime minister will be told to up the ante considerably with a new swathe of unforgiving cutbacks.

The problem remains that earnest Greek announcements don’t necessarily lead to action.

Read the whole thing.

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