Gimee … gimee … gimee … I need … need… need …I want … want … want … I want to write about Europe. I don’t have to, I want to. It is a choice, despite my earlier desperate whining, which just slipped out. I can still quite anytime I choose.
This is not the first time we have seen a surprise announcement come out of a big EU summit, so the skeptics have two strong legs to stand on here, but now that we are this far along in a long process, I believe it is not an overstatement to say this announcement is a big one. It is the surest sign yet that the political tide is changing for the better.
Working through the night in the face of pressure from the embattled euro zone countries Italy and Spain, European leaders agreed early Friday to use the Continent’s bailout funds to recapitalize struggling banks directly.
This is a big deal. It is another step toward greater fiscal and political integration for the EU and the Eurozone in particular. Folks, we are on the way to the United States of Europe. Okay, so that is a bit of hyperbole, at least at this moment, but the fact that Germany agreed to this suggests Merkel’s grand vision of a US of Europe is materializing, albeit slowly.
The decision, by leaders of the 17-nation euro zone, would allow help to banks without adding directly to the sovereign debt of countries, which has been a problem for Spain and potentially for Italy. Both countries have seen the interest rates on their debt rise to levels that would be unsustainable in the long term, and the Italian and Spanish prime ministers, Mario Monti and Mariano Rajoy, came here to push their colleagues to help.
Germany is losing in this the battle for the Eurozone, or so it seems, yet if we think back to the fables of our youth, we should remember it is the sly fox who usually ends up running the hen house, even as the farmer seems favored in the overt battle.
Italy and Spain were supported by Mr. Hollande, who arrived here on Thursday demanding “rapid solutions” to the euro’s problems. But Chancellor Angela Merkel of Germany gave little sign of budging on any quick fixes, arguing that existing mechanisms could be used, illustrating some of the deep divisions as European leaders try to restore faith in the single currency.
Alliances are necessary in war, and they are overtly forming now as the battle for the Eurozone continues. Norway has shown its favor for Germany’s hardline approach, as has Austria, but in the end, the two biggest powers will decide the outcome.
“The current disconnect between Paris and Berlin is destabilizing the euro,” Charles Grant, the director of the Center for European Reform, wrote this week. “In the long run the euro is not sustainable without a grand bargain between France and Germany.”
Yes, in this political battle, the winner will be the one who gets most of what he or she wants, and because Germany has the financially biggest guns, it is likely Merkel will get more of what she wants, which is a tighter fiscal regulation and oversight in a tighter fiscal and political union. But don’t count Hollande out just yet. He may not have the biggest guns, but he has Germany outnumbered and he has the political high ground, which, in any battle, is the more advantageous tactical position. Yes, the war is not over, but is getting closer to ending, one way or the other.
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