I wonder how long German Chancellor Angela Merkel can maintain this political balancing act of keeping her backbenchers happy while not alienating her EU allies too much.
She appears to be reaching the outer limits of good will, at least as far as her EU counterparts are concerned.
The proposal for an EU budget tsar specifically for Greece – revealed by the Financial Times – appeared to be a step too far. Sent to eurozone finance ministries on Friday afternoon, the proposal said the new budget commissioner
“will have broad surveillance competences over public expenditure and a veto right against budget decisions not in line with the set budgetary targets and the rule giving priority to debt service.”
It goes on:
Greece has to ensure that the new surveillance mechanism is fully enshrined in national law, preferably through constitutional amendment.
The language is reminiscent a school head reprimanding a wayward child. It was always going to be leaked at some stage over the weekend. Greek politicians reacted with fury.
The idea did not find fertile ground else where either. Sweden gave it the most fulsome backing ahead of Monday’s summit but even then the prime minister, Fredrik Reinfeldt, limited himself to saying he understood Germany’s “frustration”.
French President Nicolas Sarkozy defended Merkel in the first half of his response to a journalist’s question on the issue noting ”it is not a position that was expressed, or still less defended by Chancellor Merkel,” but he went on to add that the idea not democratic, reasonable or effective. Austria and Finland, traditional allies in the belt-tightening camp, were also dismissive of the proposal.
Merkel herself tackled the issue during the summit’s press conference with both Berlin and Brussels in mind.
She took refuge in conclusions by eurozone leaders in October which called for continued on-the-ground surveillance in Greece. “Therefore, in terms of quality it is nothing new.” She made it clear she wants increased surveillance of Greece’s reform pace – but did not mention the budget overseer idea in particular. The tightrope again.
The fiscal compact – agreed by 25 member states on Monday – is the tightrope in black and white. It enshrines German thinking into its short 16 articles. The debt brake is the major domestic hook. Here is what Merkel said on it yesterday:
“The debt brakes will be binding and valid forever. Never will you be able to change them through a parliamentary majority.”
Most of the rest is either already in EU law or on its way in. Still, for all its slightness, it could raise difficulties. Dublin will be under tremendous political pressure to hold a referendum – even if the legalities say otherwise. A poll for the Sunday Business Post found that 72 percent want to have a say on this issue. A referendum on a treaty that was written largely for German domestic consumption and which will not solve the crisis at hand. That is a big political ask.
It was Merkel’s summit on Monday. She got her treaty. But her EU partners are going to be looking for something in return. The question is – will she be able to deliver?
#1 by EuropeanViolet on February 1, 2012 - 11:51 am
Well, we can interpret the whole thing as a (mis)play of German interests… but I would be tempted to say that there is also some kind of “emotional” problem behind all this. I mean on one side we have Merkel that, because of her character and personal/political history, wants to control any kind of emotion and punishes very fiercely any act also by her own ministers if the results cannot be calculated. On the other side we have some kind of raw (and false) theory about punishment&reward as an optimal educational tool now elevated to the level of public policy shaping master principle maybe via this or that economic thinker/advisor. Combining the tendencies related to these two aspects we get the present political route of the German government…
The problem is that they seem unable to understand that besides all this being excessive and undemocratic, this won’t be effective either. It seems very much this ideas’re coming out from a delusion both about how to effectively educate children and then about the differences between educating a child and changing consolidated dynamics of an entire country.
I think all this is part of a more general problem on “information bubbles” we leave in, I mean the fact that we don’t have direct contact with actual situations and we rely on a lot of indirect sources for understanding this or that. So it’s not just the “Brussels bubble”, now we are seen a “Berlin bubble” and so on. I think we have a lot problems at present in Europe, but there is also some lack of contact and of feedback for sure.
#2 by Betterworld on February 1, 2012 - 1:06 pm
73% want to vote on the German treaty, the other 27% hope it will be quietly passed by the Irish parliament without a vote of the Irish people.
There will be only one outcome: it will be defeated.
The Irish people are in no mood to rubber stamp 30 years of continuing austerity foisted on them by Mrs Merkel’s insistence that they convert 100% private sector debt owed to German banks by Irish banks into public debt falling on the Irish tax payer.
That has been, and continues to be, the single greatest transfer of wealth from ordinary people to the rich in world history. It far surpasses anything done by the British in 800years of bloody occupation. Not only it it immoral, it is economically unsustainable. From a position of one of the lowest public debts in Europe, Ireland now has the highest national debt per capita in history. Thank you, Mrs Merkel.
Iceland refused the Merkel medicine and is now back in the bond markets and its economy is growing. Ireland wasn’t allowed to follow their lead … by Mrs Merkel and her ECB stormtroopers.
And Ireland is not unique. The German insistence on reaping all the rewards of the Euro project whilst failing to redistribute its bounty undermines EU cohesion and, quite correctly, casts the Chancellor as a pathological serial destroyer of nations and peoples. She will inherit the hoards of Greek refugees, followed by Portuguese refugees, to add to the Irish refugees already washing up on her shores on a daily basis.
German exports are being kept artificially cheap due to Euro weakness, promoting the German economy and undermining the economies of the periphery. It is a structural imbalance that requires a structural rebalancing mechanism within Euroland. It is not an Irish problem or a Greek problem or a Belgian problem or an Italian problem or a Spanish problem. It is a Euro problem. No ‘Germany-first’ solution will solve it.
The Irish people will do their part in confronting that pathology, if they are given the chance to vote.
#3 by Marcel on February 1, 2012 - 11:27 pm
@2
The last bit you wrote is exactly why the Eurosoviet will frantically try to bypass the referendum. There will be threats and promises. Promises of EU jobs if politicians are willing to betray their country, and threats of ‘approve or leave’. Ironically, leaving the EU and the Euro would make the Irish better off (don’t tell the politicians and tbe bankers, the only groups that did profit from the Euro).
And come referendum time, if it cannot be avoided, the chorus will be ‘approve treaty or else genocide/war/apocalypse/etc…’.
#4 by Pope Michael I on February 2, 2012 - 1:03 pm
As true Poep, I hope that all of Europe will leave the clutches of the Bogus Ordians and join us in exile.
Michael I
Supreme Pontiff
Delia, Kansas
Vatican in Exile
#5 by Teresa Stanfill Benns on February 2, 2012 - 1:30 pm
Youa re a heretic, David. You’re not a Pope. And stop harassing us please. Proof that you have been ordained and consecrated by Biarnesen. In any case, being Anglican, your orders would be nul and void. Shame on you!
Enough of petty bickering and deflecting the blows of mudslingers. Time is running out for the Church. Catholics do not realize that because they have not obeyed God’s law, they labor under a Divine and papal curse that is actually impeding the restoration of the Church. Only by absolute obedience to these laws and repentance for our sins can we hope to avert the destruction visited on Sodom and Gomorrah and earn the reprieve granted to Nineveh and Tyre. The fate of the Church is ultimately in God’s hands, but as St. Augustine said: “God who made you cannot save you without you.”
#6 by Marcel on February 2, 2012 - 10:19 pm
Haha, religion is bullshit and ‘god’ is made up for gullible people to believe in and for the leaders to profit from.
Religion was invented by the elites for reasons of money, power and sex.
#7 by Bastian on February 4, 2012 - 3:30 pm
More important than an EU “budget tsar” is to limit the ESM to a rescue fund in the real sense, that is, to keep its resources tight. It must neither serve the financial markets nor badly organized member states, but entirely the long term stability of EU economies. The EU will not survive for long, if some of its members act like failed states as, unfortunately, it is the case now.
#8 by Bastian on February 4, 2012 - 3:46 pm
@betterworld
“The German insistence on reaping all the rewards of the Euro project whilst failing to redistribute its bounty undermines EU cohesion and, quite correctly, casts the Chancellor as a pathological serial destroyer of nations and peoples.”
If you think so, then you don’t know what is going on in Germay since the introduction of the €uro. Maybe some of Germany based companies are “harvesting” but not the majority of German people. Other than Ireland, Greece etc. the Germans were put under tight austerity already in 2003, when the Irish, Greeks, Italians, Portuguese etc. were experiences an unprecedented increase of prosperity. Now, to suggest a “transfer union” as solution for the crisis is unacceptable, it would mean even more austerity for Germans and other populations in the centre.
#9 by casas prefabricadas on April 23, 2012 - 4:37 pm
It seems very much this ideas’re coming out from a delusion both about how to effectively educate children and then about the differences between educating a child and changing consolidated dynamics of an entire country.. I think we have a lot problems at present in Europe.
#10 by yacht France on May 2, 2012 - 11:00 am
In my opinion it is the same problem in the entire Europe. I am sure that we can change many things with a new strategy
#11 by charter pula on May 2, 2012 - 1:20 pm
German exports are being kept artificially cheap due to Euro weakness, promoting the German economy and undermining the economies of the periphery
#12 by mallorca blog on May 3, 2012 - 10:16 am
The German insistence on reaping all the rewards of the Euro project whilst failing to redistribute its bounty undermines EU cohesion and, quite correctly, casts the Chancellor as a pathological serial destroyer of nations and people
#13 by bestech park view ananda on May 3, 2012 - 1:49 pm
Very knowledgeable reading. This is such a great resource that you are providing
#14 by Sun Odyssey croatia on May 8, 2012 - 3:39 pm
Catholics do not realize that because they have not obeyed God’s law, they labor under a Divine and papal curse that is actually impeding the restoration of the Church
#15 by Make your hair grow faster on May 9, 2012 - 9:21 am
Enough of petty squabbling and deflecting shots mudslingers. Time is running out for the Church
#16 by Politique en France on May 14, 2012 - 8:01 pm
You’re talking about Nicolas Sarkozy and the good relationships he has with Angela Markel… Well, he “had” in fact because, as you know, since the day you wrote this post, Nicolas Sarkozy was defeated.
The new French President François Hollande (he will officially become the new French President on tomorrow morning) probably won’t be a total oponent of Merkel but he won’t forget she supported Sarkozy. Moreover, the French Communist Party is now again a strong force and be assured they will force Hollande to renegociate at least some parts of treaties.
Hollande meets Merkel on tomorrow evening so maybe we will know if the rope is going to be broken soon or not… Meanwhile, european people feel more and more angry against Germans…
#17 by wedding on May 19, 2012 - 10:05 am
Iceland refused the Merkel medicine and is now back in the bond markets and its economy is growing. Ireland wasn’t allowed to follow their lead … by Mrs Merkel and her ECB stormtroopers.