Friday 17 August 2012Eurocrash: panic and other measures
Organised by the foreign ministry, this had actually been planned for some time, aimed at shining up the "tarnished image" of Europe in the wake of the debt crisis. The target was the 80 percent or so of Germans who worry that EU member states no longer have the debt crisis under control.
The campaign was supported by a network of eleven foundations, including the Robert Bosch Foundation and the Mercator Foundation, among the largest in Germany. Celebrities were to act as "ambassadors", together with athletes and entrepreneurs. And the gang of former foreign ministers were all to be photographed with Westerwelle.
But nobody seems to have told Fischer or, at least, secured his agreement. Having read with the "utmost astonishment" media reports what he was supposed to be doing, the Green politician refused to appear alongside Westerwelle. With the incumbent foreign minister thus humiliated, Handelsblattis dismissing the whole thing as a "farce".
And, while the foreign minister was failing to get his act together at home, his boss fared little differently in foreign fields – Canada to be precise – where she met prime minister Stephen Harper for talks. The picture is not what it seems, much as many would wish it otherwise.
Even before her arrival, however, Jim Flaherty, Canada's finance minister, had shown dissatisfaction with the European approach to the debt crisis. "Europe has not done enough. You need to do more", he said.
Face to face with Merkel, Harper called on European states to tackle the debt crisis and to recapitalise their banks. The situation was frustrating, he said, because for many years was clear what needed to be done. However, because there was no common fiscal policy within the EU, the necessary steps had not been taken.
Merkel, in response, agreed that time was "of the essence" and then called in aid Mario Draghi, saying the ECB president's comments were "in line with what European leaders have been saying for a long time". She also said that the EU commission should have "stronger powers" to intervene on national budgets.
"It is a question of taking the steps that weren't taken when the currency union was created, namely a political union", she said. "Germany knows that in a common currency area political responsibilities need to be shared".
This is not Merkel's last word, by any means, as her Canadian visit is the open shot in what Reutersis heralding as a major round of shuttle diplomacy.
Greek prime minister Antonis Samaras will fly next week to meet the German chancellor and Hollande. Merkel and Hollande will meet next Thursday, a day before the Greek premier arrives in Berlin, Merkel then plans to visit Spain's Mariano Rajoy early in September, and Italy's Mario Monti says he expects to travel to Berlin before August is out.
And then, just to show how in touch the market is, with Greece on the verge of bankruptcy and the eurozone slipping into recession, the DAX stock market index finished the day just short of 7,000 points, not far off the previous-year high in March of 7,194 points.
Handelsblatt is running a piece about fund managers and other "experts", headlined, "Wir erleben erschütternde Ahnungslosigkeit" - "We are seeing staggering ignorance".
I suppose that's better than panic, but only just.
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Richard North 17/08/2012
Friday, 17 August 2012
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