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The Periphery’s Purgatory

ATHENS – German Chancellor Angela Merkel’s upcoming visit to Athens will be a far less tense affair than her earlier journeys here during Europe’s long financial crisis. Of course, Greeks have little love for Merkel; but, thanks to Europe’s modest economic recovery, some of the poison has been drawn from Germany’s relations with Europe’s most damaged and distressed economies.

Indeed, Europe is no longer considered a risk to global financial stability. The eurozone’s core economies are showing signs of revival, and financial conditions in the over-indebted periphery are improving as well. But, given capital shortages, depressed demand, and the slow pace of reform in the eurozone periphery, continued progress is far from certain.