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| Angela Merkel - Caricature (Photo credit: DonkeyHotey) |
“As long as there are individual national budgets, I regard the assumption of joint liability as inappropriate and from our point of view this isn’t up for debate,” Merkel, seeking a third term next year, told reporters after a European summit in Brussels yesterday.
Germany’s campaign colored the crisis-management summit, the 20th since February 2010. Hollande jabbed at Merkel, pressing her to overcome re-election demands to complete a deal on a banking union. The thought of elections influencing her European Union policy “never crossed my mind until I heard people talking about it here,” she said.
In the 19 hours between those two comments, the German leader checked Hollande’s attempt to ally with Italy and Spain to form a counterweight to Germany. The skirmishing preceded a November summit on the next seven-year EU budget and a December gathering that will map out the euro’s future architecture.
‘Fiscal Capacity’
Some form of euro-area “fiscal capacity” with possible joint borrowing is at the center of an options paper presented at the summit by EU President Herman Van Rompuy.
German aides kept references to euro bonds or bills out of a statement drafted before the summit. Merkel went further in the leaders’ session that lasted until 3 a.m. yesterday, getting rid of a call for “further mechanisms to prevent unsustainable budgetary developments.”
At the same time, Germany and its allies ceded little on the question of a euro-region bank supervisor, warning that an end-of-year deadline for creating it may be missed while leaving sensitive operational issues to be settled later.
In a further blow to Spain, Merkel said the Spanish government will be liable for paying back as much as 100 billion euros ($130 billion) in loans to recapitalize its banks. Plans to give the euro rescue fund the power to inject cash directly into banks won’t be made retroactive, she said. ... Continue to read.
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