Angela Merkel

Tuesday saw the Eurogroup summit continue, this time with all 27 Member States participating in the talks, but without any significant decisions being announced. Another highlight of the day was German Chancellor Angela Merkel's visit to Greece, for the first time since the onset of the European debt crisis. The German leader met with Greek PM Antonis Samaras to discuss the Eurozone crisis.

During a press conference following their meeting, the Greek leader informed that the topic of their discussion was closer cooperation between the two countries. He also assured that Greece is determined to remain part of the Eurozone and that it would implement the necessary austerity measures, even though "the Greek people are bleeding."

Angela Merkel stated that Germany and Greece “are partners and friends in Europe.” She pointed out that the Greek government's austerity efforts were already bearing fruit as reductions in the country's primary budget deficit were becoming visible.

The German Chancellor emphasized however that the road to recovery would be long and difficult and that the next tranche of EU aid, when finally released, would not be the answer to all the problems. She also expressed her satisfaction with the visit to Greece, which provided her with a better understanding of the country's situation.

The talks took place amid hostile protests in Athens, where thousands of Greeks took to the streets to show their opposition towards Angela Merkel's visit, who they consider responsible for EU's urge to impose further tough austerity on Greece.

Megan Greene, Economist at Economistmeg.com & Head of European Economics at Roubini Global Economics comments on her Twitter account: “At the end of the day, Merkel's political gesture won't plug the Greek govt budget gap and won't stop the economy from contracting further.”

Draghi: Eurozone faces challenging times but should prevail the ordeal

Earlier on Tuesday ECB chief Mario Draghi spoke on the current state of the Eurozone economy in front of the Committee on Economic and Monetary Affairs of the European Parliament. The president suggested that difficult times are still ahead and that euro area leaders should carry on implementing the necessary fiscal reforms in order to protect the economy. He stressed however that we should not lose confidence in the Eurozone.

The ECB head praised austerity efforts in such countries such as Spain, Greece and Portugal, adding that they are essential, although they might be painful.

As far as the bond purchase program is concerned, the Mario Draghi reminded that it has been initiated in order to eliminate the risk of collapse for the Eurozone, warning however that the central bank cannot do the work of national governments. “It's too easy to think that the ECB can replace government action or lack of it, [by] printing money … that's not going to happen,” Mario Draghi said.

ECB president commented on the tasks of the European Systemic Risk Board (of which he is also the chair), which delivers macroprudential perspective and which should reassure investors about the quality of bank assets. This would help rebuild confidence in the financial system.

The ECB head also said that he welcomes the project of the Single Supervisory Mechanism, which would be open to non-EU members and should not pose a problem for internal market policies.

EU leaders to back the idea of eurozone budget

EU leaders will endorse idea of eurozone budget, which would be separate from the long-term budget of the wider European Union, Reuters reported on Friday, citing draft conclusions of an EU summit to take place next week.

"In that context, mechanisms to prevent unsustainable budgetary developments, as well as mechanisms for fiscal solidarity, e.g. via an appropriate fiscal capacity, should be explored," the draft obtained by Reuters said.

The conclusions also showed that EU leaders would support the idea of eurozone countries entering into contractual agreements with EU institutions to implement reforms.