Sunday 14 August 2011

Merkel and Sarkozy to meet - for what?

The German finance minister Wolfgang Schäuble is confident that the eurozone is not going to break up. However, he rejects additional support to euro area countries in distress and common borrowing (eurobonds), as long as countries still (mis)manage their own finances. The current decisions have to carried out. Deutsche Welle quotes an interview in Der Spiegel (which I did not find online), in: Finanzminister Schäuble lehnt Euro-Bonds ab (14 August 2011).

However, Financial Times Deutschland picks up the possibility of eurobonds combined with centrally determined fiscal and economic policies, as a last resort: Schäuble knüpft Eurobonds an radikale Reform der EU (14 August 2011).

Still, the economy section (Wirtschaft) of Spiegel Online and the business section of its International edition in English offer a lot of quality material on the global financial crisis and the euro crisis.

When leading politicians from both coalition parties mount a frontal assault as vehement as this on the European Central Bank (partly as a proxy for their government), we are left wondering about how the federal government of Germany can contribute to constructive solutions in the eurozone. See: Union und FDP attackieren die Euro-Zentralbank (14 August 2011).

Thus, what can we expect in the way of proposals from the meeting between chancellor Angela Merkel and president Nicolas Sarkozy Tuesday, 16 August? See: Bundeskanzlerin Merkel trifft Staatspräsident Sarkozy in Paris (11 August 2011).

Spiegel Online International tells us that 'Merkel and Sarkozy Are Damned to Get Along' (12 August 2011), with background provided by German editorialists. Approval of the decisions by the eurozone summit 21 July is far from sure in Germany. Saving the euro and the German coalition government seem to be in conflict.

Despite the internal difficulties, can and will Merkel contribute to a grand bargain introducing eurobonds? NZZ Online reports the repeated call by Giulio Tremonti, the finance minister of Italy, but also that the French president Sarkozy is promoting eurobonds: Seilziehen um die umstrittenen Eurobonds (14 August 2011).

Ralf Grahn

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