Amid frantic coalition negotiations and prospects for Eurozone reform, German Chancellor Angela Merkel is scheduled to hold talks in Berlin today with IMF Managing Director Christine Lagarde.
Topping the agenda will be IMF participation in the economic rescue programme of Greece. Regardless, Chancellor Merkel’s political difficulties at home are likely to prevent her from committing Berlin to any new relief agreements, at least in the short term. Similarly, prospects for Eurozone reform will also be discussed, but the chancellor will need to form a government before she can readily engage in such contentious negotiations.
Expect this week’s Eurogroup summit to approve Greece’s next loan instalment, but hold off any major proposals for debt relief until a new German government is successfully in office. Prospective Eurozone reforms are likely to remain in the preliminary phase of discussions at the summit, but will not take substantial form for quite some time.
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Kai looks at security and political turbulence in the emerging market economies and also serves as a publisher with The Daily Brief.