Merkel visits Greece - A tale of two countries

At last, Angela Merkel visited Greece, being given the red carpet treatment. Her arrival wasn't welcomed by Greeks though, as thousands of demonstrators defied a ban of protests and gathered in Syntagma Square, voicing their displeasure regarding the austerity measures.

 

Greek media reported nothing about Greek citizens being injured by the riot police.(http://www.guardian.co.uk/world/2012/oct/09/greek-antifascist-protesters-torture-police)

So, the question remains: What was the point of this visit?

Alex White of JP Morgan suggested that it would be a response to calls by the main opposition party "Social Democrats" for her to be more open about her policy toward Greece.

 

Despite the austerity measures, the IMF is afraid that by 2020 the debt-to-GDP ratio will be close to 150% while the measure of debt sustainability has been set  at 120%. Consequently, a write-off of approximately €50 mn. in Greek debt is going to be discussed at the IMF annual fall meetings in Tokyo.

 

While Greece received two massive bailout packages, totaling 240 billion euros, almost none of the money is going to the Greek government to pay for vital public services or the healthcare and education system. Most of the money is being returned to the "Troika" (the European Commission, the European Central Bank and the International Monetary Fund).