Merkel Miracle: The day following my first post on Germany Angela Merkel told the German parliament there are no “miracle solutions” for the Euro crisis, and “Germany’s strength is not infinite”. She alluded to the same demands she will almost certainly hear once again later this week for debt mutualisation, a bank guarantee scheme, and whatever other new-scheme-for-rescue dreamed up at Germany’s expense.
As described in simplified terms last week, the German position seems to be that the rules of fiscal union must be signed... first. The fiscally constrained countries would appear to require the bank cheques to be signed... first. Hollande’s mealymouthed contribution is classically socialist; he demands “solidarity”... first. Solidarity appears to mean a cheque.
The conversation as reported by Reuters:
Merkel said: “Where solidarity is given, control must also be possible. Liability and control belong together.”
Hollande replied: “There can be no transfer of sovereignty if there is not an improvement in solidarity.”
The prospects for overcoming the great divide are not good at all. Monetary union might collapse and European integration be unwound because of this gap between the French intransigence-solidarity and the German prudence-rules. It is almost impossible to believe that European union could be purchased with money or charity, and certainly not by a revival of the antiquated socialist propaganda of “solidarity” against oppression.