Relative calm enough to lift spirits in Brussels


ANALYSIS:ENDA KENNY arrived in the summit chamber at 6.10pm with a handshake for European Council president Herman Van Rompuy, an embrace for Jean-Claude Juncker of Luxembourg and a kiss for Dalia Grybauskaite of Lithuania.

If any of his counterparts are concerned about the referendum on the fiscal treaty, they have not said so.

Before the doors were closed, the Taoiseach could be seen smiling with Sweden’s Fredrik Reinfeldt, David Cameron of Britain and German Chancellor Angela Merkel.

They did not have the bearing of leaders anxious to hear about the mood of the Irish electorate and whether the people are in restive or acquiescent form.

The last man into the room was French President Nicolas Sarkozy, who arrived almost an hour late.

Lagging in pre-election polls behind socialist rival François Hollande, Sarkozy had to take refuge in a cafe yesterday when heckled and booed by protesters in the Basque city of Bayonne.

Sarkozy was preoccupied with these events as he arrived in Brussels. “In a great democracy like France, one should be able to run a campaign in a civilized manner, without violence, and supporters shouldn’t get stones and eggs thrown at them,” he said.

There will be more of such talk, although European officials wonder whether “Sarko” might yet throw a firework or two as the summit proceeds.

In a gruelling saga with more setbacks than triumphs, however, this gathering feels like something of an interlude. “The crisis is not over, but this meeting is not a crisis meeting,” said Finnish premier Jyrki Katainen.

Contrary to expectation in the build-up to the summit, there will be no deal to enlarge Europe’s rescue fund because Dr Merkel is not ready. Yet another summit may be needed later this month.

Nothing happens in the euro zone without the chancellor – and she awaits the outcome of the all-important Greek debt-swap, agreed last week after months of agonising talks. Also awaited is the response of markets to a €529 billion cash injection to commercial banks two days ago from the European Central Bank.

The latest intervention brings the total amount of money the ECB has flushed into the financial system in recent weeks beyond €1 trillion, a huge sum by any standards. Whether this helps to further settle Spanish and Italian borrowing costs in the weeks ahead will be crucial.

No one suggests Europe has beaten the debt debacle, but a relative absence of turmoil in recent times has lifted spirits a little. Signs of confidence must be considered tentative but they are there nonetheless. The mood right now is far from the panic seen last autumn.

“The measures taken both at the level of the member states and the euro zone as a whole to stabilise the situation are bearing fruit. We are seeing clear signs of stabilisation in the financial markets,” Van Rompuy said yesterday.

“Interest rates decreased dramatically in a lot of countries. But we are not complacent and remain vigilant and ready to act.” Elected last evening for a second 2½-year term, Van Rompuy said a “turning point” has been reached in the debt debacle and that the time had come to shift the political agenda to growth from austerity.

This may well be in keeping with the mood of the moment, but the debate is a lot more academic than the ructions of recent months.

The acute sense remains that a final reckoning awaits Greece. What is more, Ireland’s imminent reckoning on the fiscal treaty may yet cause more than a little tremor. The battles continue.