Main focus of Monday, July 2, 2012

Hopes and doubts after the EU summit

Cyprus' President Christofias at the EU summit. The crisis country assumed the EU Council presidency on July 1. (© AP/dapd)

Europe's crisis countries are optimistic after the EU summit in Brussels. Spain hopes for a retroactive bailout for its banks, while Italy can expect less stringent terms should it seek help from the bailout mechanism. Even Chancellor Angela Merkel returned strengthened from Brussels, commentators write, lamenting that the summit perpetuates the policy of small steps.

Yet another small-step summit

The EU summit in Brussels showed no sign of the sort of radical reorientation in European policy aspired to by French President François Hollande, the liberal business paper Les Echos notes: "The Brussels summit did not fail as it might have, and that in itself is a success. Under pressure from Mario Monti, the 17 member states managed to reach a compromise. The decisions taken will calm the markets and allow the European bailout fund to help banks and repurchase debt. ... So it seems that the goal of lowering the prohibitive interest rates imposed on Rome and Madrid has been reached. However two insights have somewhat dampened enthusiasm. The first is that, yet again, Europe has adopted the tactic of small steps rather than long strides. The second is that taken together the results of this summit and France's budget for 2013 show that the reorientation of the European policy evoked before the presidential elections was just a joke." (02/07/2012)

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More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » France, » Europe
All available articles from » Dominique Seux
Who's saying what » Ways out of the debt crisis

Vicious circle appears broken

Many European media have expressed doubt over the success of last week's EU summit. But at least it set an important course, writes the liberal daily NRC Handelsblad: "The principle of equality can tempt other member states to look to their own interests. Why, for example, should Belgium encourage its population to buy government bonds when the tax-shy Italians don't dare to make the investment? There is a risk that budget discipline will converge at a level somewhere between the North and the South - in short: at less discipline. However all of these remarks and warnings are obsolete when you bear in mind that the European leaders have fewer - and above all no viable - options. Simply not give in to Monti's and Rajoy's bluff? Sounds daring, but it would have been an enormous risk. It seems that the 'vicious circle' [between the banking sector and the individual states], as the President of the European Council Herman Van Rompuy said, has been broken. Nevertheless a relapse is possible." (01/07/2012)

» more information (external link, Dutch)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Europe
Who's saying what » Ways out of the debt crisis

Merkel's secret victory

According to media reports German Chancellor Angela Merkel was virtually blackmailed into making concessions by the heads of government of Italy and Spain at the EU crisis summit at the end of last week. In truth Merkel relented only on formal, unimportant points while secretly scoring a major victory, the liberal-conservative business paper Il Sole 24 Ore writes: "The Brussels summit was unanimously hailed as a triumph of European common sense over Germany's arrogant pigheadedness. Yet Merkel only made a couple of concessions and achieved more than generally believed. … Because in exchange for her allowances Merkel has pushed through the principle of a European supervisory authority. In the grips of a storm of Euro enthusiasm evderyone rejoiced. But more Europe means less sovereignty. That looks simple on paper but the problems will emerge in the coming months when it becomes clear that - de facto - it's not about yielding sovereignty to Luxembourg or Cyprus but to Germany."  (01/07/2012)

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More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Germany, » Italy, » Spain, » Europe
All available articles from » Roberto Perotti
Who's saying what » Ways out of the debt crisis, » The row over debt mutualisation

Without euro bonds Europe will not survive

Without the introduction of joint bonds the future of Europe hangs by a thread, writes the liberal business paper Financial Times with an eye to the EU summit: "The most important event last week was probably not the agreement at the summit anyway, but the statement by Ms Merkel that there will be no Eurozone bonds 'for as long as I live'. My belief is that this statement reveals she is not serious about political union, to which she has been paying lip-service over the past few weeks. ... If Ms Merkel is right and there are no Eurozone bonds in her lifetime, the Eurozone will not survive. Without Eurozone bonds or a change in ECB policy, Italy's and Spain's debt - and Eurozone membership - is not sustainable. That was as true on Wednesday as it is today." (01/07/2012)

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More from the press review on the subject » EU Policy, » Fiscal Policy, » Economic Policy, » Germany, » Europe
All available articles from » Wolfgang Münchau
Who's saying what » Ways out of the debt crisis, » The row over debt mutualisation

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