Posted on 07/02/2012 2:58:58 AM PDT by Olog-hai
At first glance, it looked as though Chancellor Angela Merkel gave up several core demands during the EU summit on Thursday night. But did she? A closer look reveals a clever retreat to secure greater gains. To find the summit's true loser, one must look no further than Paris. …
Plans now call for allowing the eurozone's permanent bailout fund, the European Stability Mechanism (ESM), to provide direct aid to banks. This could help Spain out more than any other country—it means that ESM aid to the country will no longer be taken into account when calculating Spain's public debt. …
In the run up to the summit, Germany had ceaselessly repeated its "no shared liability without shared oversight" maxim. As such, the two core decisions made in Brussels look like a clear defeat for Merkel. In fact, however, the chancellor didn't abandon any position that hadn't already become untenable. And with the fiscal pact and the growth pact, she has received a pair of important trade-offs.
After all, it really makes no sense to loan Spain cheap money to save its banks when doing so only increases the country's sovereign debt load and drives up the rates Madrid must pay for issuing new debt. Plus, the terms of the agreement also state that aid will only begin flowing to the banks once an effective European banking supervision mechanism, under the auspices of the ECB, has been put in place. That will take some time. … If the ratification process goes smoothly, the fiscal pact will grant Merkel the tool she needs to impose strict austerity measures on highly indebted states. …
(Excerpt) Read more at spiegel.de ...
Merkel's concession is more than compensated for by a diplomatic victory she scored in the run-up to the summit: Late last week, she managed to get new French President François Hollande to sign off on her fiscal pact, which is deeply unpopular in Paris, in return for her support on the €130 billion ($165 billion) European Union "growth pact."So the Berlin-Paris axis is gone and replaced by a new Berlin-Rome axis.
The inequality of the deal is difficult to overstate. The growth pact is made up of little more than empty promises and dreams that can never come true. Though it won't spur any growth in Europe, at least it won't cost Germans any more money either.
Should one be looking for a summit loser, in fact, it necessary to look no further than Hollande. Not Angela Merkel. She merely did what she always does on the EU stage. She made compromises. And pretty clever ones at that. …
Sounds like she didn’t cave in to outright subsidized socialism...germany to some extent still demands results, unlike it’s overly leftist southern neighbors. To read more later, thanks.
Why would they keep insisting on giving up sovereignty though? That’s an endless theme with the German politicians.
My perception of things is they want more restraint on nations they’re loaning to...which makes sense if the currency is to stay together. I mean, if these folks want to stay in the euro, get unlimited funds (just in case), there ought to be standards and restraints. That or they need to slowly dissolve the whole union. Sovereignty to most of those nations means disaster.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.