PARIS (Reuters) – The masks have fallen. From now on, we will all be living in a more German Europe, with economic policy driven by Berlin’s hair-shirt export-or-die model.
That is the lesson of a deal among euro zone leaders on a financial safety net for debt-stricken Greece, adopted largely on German conditions on Thursday after months of wrangling that battered confidence in the single European currency.
“The politics of the EU are undergoing a fundamental change at present, with Germany becoming increasingly willing to cast off the shackles of the past and make its voice heard,” said RBS analyst Timothy Ash in a research note.
Chancellor Angela Merkel accepted a last resort rescue plan for euro zone states in distress after winning her key demands — a role for the International Monetary Fund in the euro area, a pledge of tougher European Union budget rules and no loans to Greece until it is close to drowning.
She swatted any move to issue euro zone government bonds jointly or to question Berlin’s own role in the euro zone’s economic imbalances, about which the German political class is united in denial.