Opinion

Paul Taylor

Euro zone deal points to a more German Europe

Paul Taylor
Mar 26, 2010 15:57 UTC

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.

Q+A-Fox in chicken coop? EU eyes IMF role in euro zone

Paul Taylor
Mar 24, 2010 16:24 UTC

PARIS, March 24 (Reuters) – For months, euro zone countries
have resisted any suggestion that debt-stricken Greece should
turn to the International Monetary Fund for assistance.

Now, at Germany’s behest, the 16-nation single currency bloc
seems close to agreeing that the Washington-based global lender
would play a substantial role in any financial rescue for a euro
zone country in trouble.

The arguments for involving the IMF are mostly financial,
while the case against it is mainly political. Here are some of
the pros and cons of an IMF role in the euro area:

The euro zone: same bed, different dreams

Paul Taylor
Mar 22, 2010 06:52 UTC

PARIS (Reuters) – Like a ghastly family row in which relatives dredge up long-buried grievances, Greece’s debt crisis is driving Europeans to exhume old fears and resentments in a bitter debate about the future of their common currency.

Behind the dispute about whether and how to help Greece, the most egregious violator of the European Union’s fiscal rules, lies an unresolved difference between founders Germany and France about the nature and purpose of the euro.

With governments in Berlin, Paris and Athens under strong and contradictory pressures from anxious voters, recrimination is starting to get out of hand.

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