GERMAN REACTION:CHANCELLOR ANGELA Merkel has described Thursday night's summit deal on a permanent eurozone rescue fund as a first step towards closer economic and political union in the EU.
But the German media and financial analysts greeted with scepticism her claim that the summit had secured the “overall stability of the euro”.
“This (deal) goes a step in the direction of economic government ... now we need more in common in our economic policies,” she said. Alongside stable state finances it was important, she said, that countries “step by step, in a long process” develop common economic policies.
Dr Merkel called the deal to create a permanent EU rescue fund a “great day for Europe”, but German editorial writers voiced serious doubts yesterday. The influential Frankfurter Allgemeine speculated, in an analysis headed “From Emergency to Regular Case?”, that the new fund would soon be a normal part of EU structures.
Die Welt saw Dr Merkel’s as the winner, but noted that her “victory came at a high price”.
“This is Merkel’s Europe now,” the paper noted, saying the German leader had altered her approach to Europe significantly in 2010, “sometimes into the exact opposite”. The Kohl-era consensus style was history, the paper said – “the honest broker in the spirit of Bismarck” – and described the Chancellor’s new style as more national-oriented and “very British”.
Former chancellor Helmut Schmidt picked up on criticism of Berlin’s tough negotiating stance ahead of the summit.
“Whoever tries tactics at a time like this, even discussing a collapse of the eurozone, is lacking in any world vision,” he wrote in Die Zeit weekly.
A collapse of the common currency, unpopular in Germany, would end up hurting Europe’s largest economy most of all, he said. “The momentary popular success would end in a hangover.”
German financial market analysts were not impressed with the summit results, with one calling it “another missed opportunity”.
“European leaders failed to address the issue of debt sustainability and possible insolvency problems prior to 2013,” said Carsten Brzeski of ING bank. “Debt restructuring, a common euro zone bond or an increase of the EFSF? None of these issues have been addressed. But they need to be.”
BNP Paribas analyst Ken Wattret said the measures were “piecemeal, unconvincing and reactive rather than pre-emptive”. “This is going to have to change if confidence is to be restored,” he said.