EUROPEAN DIARY:In spite of efforts to present a united front, Europe's leaders continue to have very different views about its problems
EUROPE’S LEADERS may be trying to present a united front in the face of the euro sovereign debt emergency. Yet the more they talk, the more divided they seem.
Moves to create a €750 billion rescue fund for distressed euro members marked a massive retaliation against the forces that threatened the very viability of the single currency. Yet as Europe weighs the consequences of that fateful decision, the strain is showing.
From Berlin comes quiet but insistent concern to avoid fomenting Euroscepticism or conditions that could be seized upon by a German version of Jean-Marie Le Pen, the virulent French right-winger. From Paris, meanwhile, come strident claims that the rescue net marks the adoption of a Nato-style mutual defence clause in the currency area.
In Brussels, apprehension is palpable. Reflecting widespread frustration at Germany’s stance in the crisis, European Commission chief José Manuel Barroso dismissed as “naive” Berlin’s demands for changes to the European treaties to reinforce the euro rulebook.
Interviewed in no less a paper than the Frankfurter Allgemeine Zeitung, Barroso couldn't have been clearer: "We have just finished a Treaty reform, which was a traumatic experience in some respects. It would also be naive to believe that it will be possible to confine a Treaty reform to areas that are important to Germany, since the UK and other countries would, of course, also put forward their wishes."
For good measure, Barroso said German leaders of all hues should do more to make clear the benefits of the currency. “In recent years, among German politicians in all of the main parties, there have been too few strong voices that have explained to the public how important having the euro is to Germany,” he said.
“Our decision-making process simply took too long. The markets saw too many contradictory signals.”
Predictably, his remarks drew a frosty response from the Merkel administration. Economy minister Rainer Brüderle said he was surprised at the criticism, saying the “current process of economic policy co-ordination cannot prevent problems arising in the member states and the euro zone.”
To accuse Germany of showing a lack of awareness of Europe was absurd, Brüderle said. “In the current crisis we’ve proved that we are ready to demonstrate political and financial solidarity.”
It’s clear enough that Brüderle’s remarks represent mounting frustration in Berlin at Merkel’s many critics. More interesting is that Barroso, who is not given to hurling brickbats in public at Europe’s highest powers, should have chosen such a public forum to make known his unhappiness.
No less significant was a plea from European Council president Herman Van Rompuy to avoid any triumphalism over the EU response to the crisis. “I do not belong to those who are cheering with a European flag and who are almost thanking the markets for obliging the EU to take a step forward on political integration,” he said in a speech.
“European integration is not a goal in itself. I would rather not have had this crisis, and I am sure the Greek people and most taxpayers in the Union would agree.”
Van Rompuy did not say to whom he was directing his remarks. It seems, however, that some people are revelling in the disruption. That he should say so out loud is in keeping with the pungent, hothouse atmosphere that prevails. In this particular drama, there are as many interpretations of what exactly is going on as there are participants.
Hence we see daily moves to define the narrative. For example, disquiet in Berlin and Brussels was scarcely concealed when French Europe minister Pierre Lellouche declared that the rescue amounted to a de facto change to the European treaties.
From the home of the European Central Bank (ECB) in Frankfurt, meanwhile, comes strong implicit criticism of Merkel’s approach to the crisis. Saying the euro was in danger – as Merkel did – was akin to fanning the flames of crisis, said Lorenzo Bini Smaghi, a member of the ECB’s executive board.
In ordinary times, this would be seismic stuff. In the present malaise, however, public exchanges are more robust than usual.
Divisions have even emerged from within the inner sanctums of the ECB itself, an institution not known for public infighting. German central bank chief Axel Weber, favourite to succeed Jean-Claude Trichet, declared his opposition to the bank’s purchase of government debt but was outvoted by his peers, something that may yet have a bearing on the succession stakes.
Little is certain in this risky panorama. The EU/IMF rescue scheme bought time for the European authorities but there is little consensus as to how they got to this point – and how they go forth from it.
