Merkozy too fainthearted in euro crisis

At their Monday meeting in Berlin German Chancellor Angela Merkel and French President Nicolas Sarkozy prepared for the next summit meeting on the euro crisis. The Greek bailout and the Tobin tax are firmly on the agenda. But with their half-baked ideas they are wasting valuable time, commentators write, warning that a catastrophe is just around the corner.

Berlin and Paris powerless in face of crisis

The German-French duo has once more failed to summon the energy necessary to avert the looming disaster, writes the liberal business paper Les Echos:

“First of all Greece is facing state bankruptcy. Secondly, distrust is growing regarding all of the Eurozone countries except Germany. Yesterday, for example, investors borrowed money at negative interest rates in Berlin. Or to put it another way: they preferred to pay the German state to keep its money instead of taking the risk of placing it elsewhere. Thirdly, transactions between banks are frozen because they no longer trust each other. And fourthly, bond terms are growing ever shorter, both for states and for businesses. Now all forces must be summoned to prevent the European financial system from collapsing and pulling the entire continent into the abyss. It will soon be too late.” (Les Echos – France | 10/01/2012)

German-French strategy futile

The meeting between German Chancellor and French President Nicolas Sarkozy won’t help save the Eurozone, writes the conservative daily Rzeczpospolita:

“They don’t know where they’re supposed to get the money to bail out Spain and Italy if it comes to that. They have no emergency plan for Greece in the event that talks with the creditors over debt write-offs remain unproductive. They are afraid to recapitalise the banks and at the same time shy away from the questions about whether it makes sense to rescue bankrupt EU states. From time to time they entertain the idea of a setting up some kind of of economic government which basically leads to more control over the economies of the other euro countries. But they avoid creating a further budgetary pillar in the EU – namely transferring funds to less competitive states. Their strategy until now is one of defeat.” (Rzeczpospolita – Poland | 10/01/2012)

Merkel and Sarkozy acting selfishly

The French-German summit in Berlin on Monday has upped the pressure on the other EU countries to undertake reforms and is forcing them to make some quick decisions, writes the conservative daily Lidové noviny:

“We don’t have much time for serious discussion on the existential question of whether we’re willing to accept limitations on our sovereignty in exchange for being part of the inner core of European integration. The chancellor and the president want to have the treaty on a Union with budget supervision by the end of January.

… Let’s disregard the fact that none of the proposals can solve the debt crisis. Budget supervision is above all intended to calm the German public. The financial transaction tax is meant to help Sarkozy get re-elected as president. The pressure is on, and we Czechs must decide what we want. This is a clear step in the direction of a common economic government.” (Lidové noviny – Czech Republic | 10/01/2012)

ECB must ensure growth

After the meeting between Merkel and Sarkozy it’s clear that Germany will continue to pursue its austerity programme this year, too. The ECB must therefore play a key role in ensuring that Europe remains attractive for investors, the daily La Vanguardia writes:

“If Germany doesn’t want to be the engine of Europe – and it has its reasons not to – Europe’s internal market urgently needs to be mobilised. We hear again and again from the ECB that the Eurozone is an economic and monetary union, but only the second part has been accomplished – and even that with difficulties.

… The German Minister of Finances, Wolfgang Schäuble, has warned that foreign investors don’t trust the European Stability Mechanism. You can’t give them a mortgage on a property in Alicante for instance as a guarantee for their investment in Europe – they need more. First of all they need a good price, that means a euro that is cheaper than it is now, and then they need the prospect of recouping their investment thanks to a flexible monetary policy that does its job over time in terms of boosting growth. The ECB plays a major role here.” (La Vanguardia – Spain | 10/01/2012)

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