Growth on agenda as all board the bandwagon in Brussels
With continued Greek uncertainty there was an air of unreality at the end of EU summit No 18, writes DEREK SCALLY
IT WAS 1.20am yesterday morning when a scowling Angela Merkel strolled into the half-empty German briefing room in Brussels. Not a press conference, her handlers insisted, just a short statement.
Hands clasped chastely before her, Merkel gave a brisk report on a “sensible” informal meeting of EU leaders, with “widespread agreement” on the need to balance austerity and growth.
After her statement, in an uncertain moment of silence, a muffled voice could be heard through the partition wall. François Hollande was in full flight.
The French president used his Brussels debut dinner – asparagus, John Dory fish, chocolate pudding – to revive the idea of lowering borrowing costs for struggling member states by mutualising euro zone debt.
“François Hollande presented his position as promised,” remarked Merkel drily, when asked. She responded by listing two objections to so-called eurobonds. One is legal – existing EU treaties forbid such a move – while the other is political.
“I said that [for eurobonds] we need greater economic co-ordination in the euro zone,” she said.
The German leader was gone after just five minutes, not even trying to compete with the show next door. On a stage before a blue screen, Hollande took questions from a capacity crowd until long after Angela Merkel had left Belgian air space.
“It’s true there is a difference [on eurobonds],” he said. “Germany’s line of thinking is, to give the most optimistic version, that eurobonds could only be an end point, whereas for us they are a starting point.”
For the French Socialist, the eurobonds discussion was a useful means to establish his independent, centre-left credentials with EU partners. Ahead of next month’s parliamentary elections, it sent the message to voters: I am my own man, not the rear end of a Franco-German pantomime horse. His post-summit performance fell short of the Sarkozy zing, but it was an energetic contrast to Angela Merkel’s sombre performance. But, as so often after Brussels summits, fleeting impressions had vanished in the morning light.
Officials who attended the talks say Hollande’s crisis-weary colleagues listened politely to his eurobonds arguments. Belgium and Luxembourg support the idea, Taoiseach Enda Kenny said afterwards it would be “fair to explore” what eurobonds would involve.
Angela Merkel was pleased to see her anti-eurobond front holding – from the Netherlands, Nordics and Baltic countries right down to Romania and Bulgaria. Germany argues that pooling sovereign debt would create a new source of cheap credit for crisis countries, reducing their incentive to reform while increasing borrowing costs for others.
“Eurobonds would just institutionalise the problem we’re trying to solve,” said Jyrki Katainen, Finnish prime minister.
The German leader had the crucial support, too, of ECB president Mario Draghi, who echoed her remark that eurobonds only made sense after a move to closer common fiscal union. On his way home Draghi said leaders had made a “commitment” at the informal meeting to move European monetary union (EMU) to “new stages”.
“That is the best answer to what is going to be happening in the medium term,” he said.