U.S. equity markets jumped sharply about half an hour ago following a report in The New York Times that German chancellor Angela Merkel said:
I want Greece to stay in the euro zone and that’s what I’m working for.
Merkel’s comments follow a meeting with Greek prime minister Antonis Samaras in Berlin. She also said that she believes that the Greek government “will do what it takes to solve the problem in Greece.”
Another solution to the problem was expressed by the leader of Merkel’s party, who said that a Greek exit “would not be a problem for the euro.”
For his part, Samaras is pleading for more time to achieve the goals set for the country as a condition of the aid it has already received. “What Greece needs is a chance for growth,” he said.
The European Central Bank said last week that it would propose a solution to the Eurozone’s financial crisis “over the coming weeks,” which indicated that the bank will await a September 12th decision from Germany’s Constitutional Court on whether or not Germany may legally fund sovereign bond purchases. From the timing, it looks like “the coming weeks” means the end of September.
Merkel’s comments today lifted hopes that a solution for both Greece and the other troubled Eurozone economies is within reach if we can only remain patient. And like every other hint that Europe may have a solution for its problems, this one pushed stock prices up, if only momentarily.
The DJIA peaked at 13,143.57 before turning downward again to stand at around 13,121 now. The Nasdaq Composite and the S&P 500 indexes followed the same path.