These days, the most important issue in Europe is related to the economic problems that exist in Greece. Thus, the finance ministers are going to take a decision with regard to the best solutions that can finally shield the banks from painful fallout. Additionally, they are going to decide who will manage the euro area.

However, because the financial leaders who are operating within the euro zone intend to control multiple fronts, this financial area is about to become an international scapegoat. The reason for this is mainly because Europe confronts with a series of new problems, such as the Greek crisis, Spain and Italy’s huge debts and many others.

Trends on Stocks

These days, the stocks are also falling on the European markets. The bond risks are very high and euro shows an important decrease. Due to the high monetary instability, the decision to help Greece by approving another €8 billion loan payment has been postponed to the middle of October. Moreover, the Greek Prime Minister is planning to increase the taxes and cut the budgets down in order to lower the amount of the credit line. All these have an unfavorable impact on stocks.

Reviewing Greece

The Greek economy is a very important factor which can easily destabilize the entire euro zone. The European Commission has decided that Greece must post a net surplus of the interest costs next year. As well, its debt is going to decline starting from 2013.

Obviously, the investors are not having any positive comments about these measures. Most of them expect Greece to reach the default term. Moreover, they consider that Portugal is about to have the same fate as Greece, while Ireland will most probably return to fiscal health.

What Does Sarkozy Say?

Sarkozy considers that if Greece is going to fail, Europe will compromise its international position. Therefore, the European leaders cannot let Greece fail for both, moral and economic reasons. For the moment, 14 euro-countries have already approved the temporary reinforcement fund for Greece. This fund is meant to sustain the secondary and primary markets by infusing capital for bond-related operations. Therefore, there are new possibilities for capital infusions and credit lines, especially for banking-related systems.

What about “Leveraging?”

The “leveraging” measures, which are meant to rebalance the European economy, should be completed without new interventions of parliamentary ratifications. Therefore, the solutions that officials intend to adopt must be legally feasible.

This way, many leaders are considering that they must enhance the fund’s capabilities even if this thing means to use borrowed money. The reason for this is mainly related to the general concern with regard to the current economic situation.

The ECB and Its Role

The ECB has a very important crisis-management role. However, its role relates to numerous issues that depend on the inflation index. For the moment, the officials are trying to confer this mechanism more flexibility in order to guarantee the so-much needed temporary fund. Additionally, the ECB is going to cut the debt of the donor countries, lowering France’s debt by €8.6 billion and Germany’s debt by €11.5 million.

The Terms of ESM
The new terms of ESM relate to the euro-area leaders, who have declared that they are going to support Greece for solving its debt-related issues. This accord intends to imply every single euro-nation from saving Greece from insolvency, which might drag the entire Europe into an economic vortex. There are many countries which will receive collaterals by giving something in return. The actual terms of ESM are meant to keep the Europe united.