For Angela Merkel there are few things which are as set as her summer holidays. She always leaves Berlin for two weeks with her invisible husband for a hiking holiday in the Tyrol Alps.
The so-called Berlin Republic—meaning Germany’s political class—is traditionally off the whole of August as are the European Union diplomats, financial crisis or not.
In Spain, things are different this year. The spokesperson of the Spanish Prime Minister announced Tuesday that Jose Luis Rodriguez Zapatero will postpone his summer holiday to “monitor economic indicators” as Spanish yields were hitting fresh euro zone highs.
Back in July, politicians were convinced that with the Greek debt deal reached in Brussels, financial markets would patiently wait for them to come back from holiday to get binding approval from national parliaments.
A severe mistake. If only European politicians had had better knowledge of history, they would have been alert to the crisis odds in the month of August.
Looking back through history, the month of August seems to have been a bad one for peace. At the end of August in 1939, Hitler ordered the attack on Poland; the Prague spring was brutally interrupted by the invasion of the Soviet Union and its allies in the Warsaw Pact in August 1968; in August 1990 Saddam Hussein's Iraq invaded Kuwait and more recently Russian tanks rolled into Georgia in August 2008.
The month hasn't been a good one for financial markets either throughout history.
On August 17 1998 the Russian financial crisis hit the country, triggered by the Asian financial crisis. It took Russia almost a decade to recover from the economic crisis according to statistics from the International Monetary Fund.
The Dow Jones lost more than 15 percent in August 1998, the German benchmark index DAX even more than 17 percent.
The subprime crisis, which started silently in early 2007, gathered momentum in August with several hedge funds experiencing unprecedented losses culminating with the suspension of three investment funds by BNP Paribas due to the “complete evaporation of liquidity” announced August 9.
This prompted concerted action by central banks worldwide to provide liquidity for the first time since September 11, 2001.
Of course the Greek crisis didn’t start in the month of August nor did it heat up last year in August. But looking at how fast the contagion issue is back after the long-awaited deal on Greece from July, one might wonder if this August will be a hotter one than usual.
One trader who wanted to remain anonymous said that that one way to still enjoy the holiday is to “buy a lot of puts and just leave the scene until politicians are back."
"Anyway the markets are no more driven by profits and business ideas; these are political markets ever since the debt crisis set off," he added.