ECB surprises markets with interest rate cut and purchases of private assets: Round-up of reactions from around Europe

As we predicted might happen, the ECB surprised markets yesterday with the announcement of an interest rate cut and the purchases of private assets.

Open Europe’s Raoul Ruparel has a full analysis on his Forbes blog, where he concludes:

“In summation, Draghi surprised the markets with some bullish action. That said, I remain unconvinced that these programmes will do much to boost inflation, growth or even credit supply in the Eurozone. Importantly, the ECB is nearing the end of the actions it can take, and it is very aware of this. The onus has now once again been shifted to governments, with the expectations rising for action. For the first time since 2012, pressure is now really increasing for Eurozone governments to reassess the Eurozone’s institutional structures and take action to pool further sovereignty. Draghi may have come bearing gifts for markets but he came with further warning for governments.”

Needless to say, the fallout from the ECB's announcements has been widespread and varied. Below are some of the best reactions from papers across Europe. As one might expect, the German press was less than impressed with the policies unveiled by Draghi:

Die Welt’s Economics Editor Sebastian Jost describes the announcement as “Draghi’s last roll of the dice”, and claims that the ECB has demonstrated “an unusual passion for experimentation”. He also argues that “the ECB has now done pretty much everything which appears to be economically justifiable. Whoever wants a stable monetary union should hope that it does not go any further.”

Süddeutsche Zeitung’s Economics Editor Ulrich Schäfer describes the ABS as a “highly dubious innovation”, claiming that it resembles many of the financial products that contributed to the initial financial crash “when no-one could ultimately identify who had lent whom how much, and therefore who had assumed what risk.” He concludes that it is “ironic” that the ECB wants to give such products “renewed respectability”.

FAZ’s Economics Editor Holger Steltzner criticises Italy and France for delaying structural reforms in order to get more help from the ECB. He also argues, “Does the purchase of securities, which banks are struggling under the burden of, even come under monetary policy?...How can the ECB eventually return to normal? As soon as it increases interest rates, it will threaten itself with losses.”

Again as many would have predicted, the Mediterranean press took a more sympathetic view of Draghi’s decisions.

An editorial in Spanish daily El País argues that “the ECB hasn’t disappointed…[but] it’s equally necessary that the governments with sound public finances – and notably the German government – intensify investment and temporarily back greater flexibility in the necessary requests for public finances adjustment in the eurozone as a whole.”

The deputy editor of Spanish daily El Mundo, John Müller, makes an interesting point, “The enormous debt – both private and public – that has been amassed, is such a huge burden that it is surprising that no-one is addressing the problem seriously...Yesterday, Draghi only asked for help [from eurozone governments] in the form of fiscal measures and reforms, but not [in the form] of debt restructuring. In short, we don’t know if the monetary sorcerer has correctly identified the reason why we have lost the favour of the gods of growth.”

Columnist Jean-Marc Vittori writes in French business daily Les Echos that “the currency won’t be enough to save Europe”, and argues, “[There’s] no tenable monetary union without budgetary union. In a continent where the temptation to withdraw is growing, this appears to be a challenge. Nonetheless, it’s the condition for the survival of the euro.”

Italian Economics Professor Donato Masciandaro writes in Il Sole 24 Ore, “Draghi couldn’t have been clearer: the later the necessary fiscal and structural policies come, the less effective monetary policy will be…Such a decisive statement should make everyone reflect. The [European] Union is like a bogged-down machine. It has at least four traction wheels – currency, taxation, competition and labour – but only one of them is working. In such a situation, the machine risks going under.”

Italian journalist Danilo Taino writes in Corriere della Sera, “[Italian Prime Minister Matteo] Renzi is a lucky guy, since no [Italian] Prime Minister ever got this sort of help from the ECB. This means, however, that [Renzi] won’t be able to ask for anything else from Draghi. The ECB President has reached the extreme limit – except for a difficult, potential government bond-buying programme. From now on, everything is in the hands of governments.”

One interesting take away, particularly from the articles from around the eurozone periphery, is that there seems to be a renewed push for measures such as further budgetary union and debt-pooling. It looks as though there is a growing acceptance of the limitations of ECB action, and the continued flaws in the Eurozone architecture – something which we have long warned of.

"Something is rotten in Europe" - European elections reaction round-up

As the dust settles following the European elections, we are now beginning to see some interesting analysis and commentary from across the EU. Here is our round-up.

Despite the relative success of the established parties in Germany, many commentators have picked up on the EU-wide picture with FAZ's economics editor Holger Steltzner writing that the rise of anti-EU and protest parties across Europe should serve as a “dramatic warning” and that 

“The EU can no any longer be a one-way street, but should give back [powers] to the member states or local authorities.”

Die Welt's front page leader, written by Alan Poesner argues that:

"Something is rotten in Europe. And the reaction of politicians from the large European party-blocs makes it clear where the problem lies. 'Given the strength of the populists we have to work even closer together' is what you hear from both sides. This means: the establishment is locking ranks and closing its ears."  

In Bild, Jan Schäfer argues that:

"In the future, extremists from both sides will grip Europe like a set of pliers! The result: more nationalism, more little-statism and less free trade. That is bad for exports, for jobs. It is the opposite of what Europe needs right now."

Spain's leading daily El País leader argues that:

“In reality, it will be difficult to get out of the dynamics of a grand coalition, irrespective of whether the latter is the most convenient [option] from the political point of view, which demands a display of alternatives. But there is little doubt [a grand coalition is the most convenient option] from the perspective of the necessary stability of the continent.”  

In Italian daily Corriere della Sera, Aldo Cazzullo argues that:  

“The 2014 [European Parliament] elections will be remembered as the historic defeat of a political system. The eclipse of traditional parties. The rejection of the European establishment… The European vote confirms a trend that extends itself well beyond the continent: the sign of our times is the revolt against the elites, the institutions, the traditional forms of representation. And Europe is perceived as the bedrock and the guarantor of those elites people are rebelling against.”

In France, Nicolas Barré argues in Los Echos that: 

“With regard to Europe, the message from voters and those who abstained is rather a great distress towards political projects that seem empty to them – as [these projects] offer a choice between going backwards, which is always something difficult to enthuse about, and moving forward, but without knowing very well to where. Since the status quo is not an option either, for being so unsatisfactory, one can understand that a large number of voters have stayed away from ballot boxes or have voted 'against'."  

Dutch daily De Volkskrant features a comment piece by Alexis Brezet, the opinion pages editor of French daily Le Figaro in which he argues that:

"the European idea, as developed since the Treaty of Maastricht, is the main victim of the elections. If you add the non-voters to the voters who have supported a europhobic or eurosceptic party, it's only one third of EU citizens which supports the European project. Apparently Europe, which is being shaped without the people and sometimes against the people, doesn't appeal any longer...If Europe wants to win back the hearts of Europeans, simple reparations won't suffice: a fundamental reform is needed." 

A leader in Belgian daily De Tijd argues that:

"the eurosceptics will in-avoidably weigh on decision making in their own countries and in Europe... Cameron will now refuse to make any concessions to Brussels... discussions about British EU membership and its modalities will become very difficult. France is an even bigger problem. The core eurozone country has struggled for a long time already, economically... Now that a quarter of the French have voted for Marine Le Pen... it will become even more difficult for Hollande to implement necessary reforms and savings."

In Poland meanwhile, most commentators are focusing on the national implications of the vote - where Civic Platform beat Law and Justice by a very narrow margin - and have not really commented on the broader European picture.

No doubt much more will be written about these elections in the coming days and weeks, but it's clear that many already consider them to be a potential watershed moment for the 'European project'.

Miliband’s EU pledge divides UK media – but is largely ignored in Europe

There is this much chance we will hold an
EU referendum if I'm Prime Minister

Ed Miliband’s intervention yesterday – in which he said he would only hold an In/Out referendum in the event of a new EU Treaty transferring specific powers from the UK to Brussels – has, as expected, divided commentators and media opinion in Britain.

Echoing a similar point we made in our response yesterday, the Telegraph’s leader describes Labour's new policy as a "classic fudge" and argues that:

"Effectively, Mr Miliband is offering either more Europe or no Europe... The Tories and Labour like to give the impression that they have fundamentally different policies. But they are, in truth, remarkably similar”.

Also in the Telegraph, Peter Oborne argues that the new policy is

"by far the biggest mistake of [Miliband's] leadership... [this] unforced error is a priceless gift for David Cameron because it amounts to an unequivocal vindication of the Prime Minister’s decision last year to promise a referendum on Europe after the election.” 

However, on Conservative Home, Lord Ashcroft warns that Miliband’s announcement could lure the Tories into talking only about one thing – Europe, arguing:

“the Conservative Party would not only be missing the chance to talk about the things most voters care about more, like the economy, jobs and public services. It would also, as far as these voters are concerned, be proving again the out-of-touchness (outness of touch?) of which it has for so long been accused." 

The Sun has commissioned a snap YouGov poll which found that 50% of voters disagreed with Miliband’s pledge to only hold an in/out referendum if more powers are transferred to the EU – a move he admits is “unlikely” - while 32% backed his policy but nearly twice as many people regard it as a cowardly move rather than a bold one. The Sun's leader argues that the wait-and-see approach has made Miliband “even more unpopular” with voters and the paper concluding that he'd have been better off "keeping schtum".

The FT broadly endorses Miliband's speech though echoes our caveat that “Mr Miliband’s policy does not guarantee the British people the right they should have to an in-out referendum if the bloc ultimately redesigns the way it operates in the wake of the eurozone crisis.”

In a less coherent leader, the Guardian argues that Miliband is desperate to avoid having to deal with a referendum if elected as:

"Trying to avert an "out" vote would drain all energy from anything else a Miliband government might want to do; enduring one would sink it entirely."

What about European media? Well, surprisingly, Miliband has been largely ignored. There’s almost nothing at all in the German press, though Der Spiegel's Carsten Volkery – not known for being the Tories' greatest fan – argues that:

“Chancellor Angela Merkel, French President François Hollande and the EU Commission should now secretly have their fingers crossed for Miliband. For all public expressions of sympathy for Cameron’s reforms, the British referendum seen as a massive nuisance in the rest of the EU.”

Walter Oppenheimer, London correspondent for Spanish daily El País, writes that Miliband's decision not to hold an EU referendum:

"It is, however, a very calculated risk: it can cost Miliband some votes – and who knows whether those votes can cost him the election – but leaves his hands free if he manages to get into Downing Street."

The French press has almost nothing bar news agency write ups, ditto in the Italian and Spanish press, although Miliband got a couple of hits in Switzerland. The speech was picked up by the Polish Press Agency but they focused on the immigration/access to benefits angle and completely ignored the wider referendum issue. The Nordics are quiet too, despite Swedish Foreign Minister Carl Bildt trying to weigh in on the debate yesterday.

We won’t pass judgement as to why Europe has so profoundly ignored Miliband.

Cameron's poker face?

No, Europe hasn't collectively turned against Cameron (which you would think from reading headlines like these - seriously?). Though several politicians from around Europe haven't exactly come out celebrating following Cameron's speech - which doesn't help the Tories - he's getting a fair hearing amongst several commentators. 

Enrico Brivio, columnist for Italy´s main business daily Il Sole 24 Ore, provides a vivid if mixed analysis of the speech, saying:

“Poker players in the Old West said you play more comfortably when you put the gun on the table. And David Cameron has today put the referendum gun on the table of European negotiations.”

He says Cameron has taken 'a big gamble', but has nonetheless decided to follow a “lucid political strategy which [Italian] politicians…don´t always show.” 

Rzeczpospolita foreign editor Jerzy Haszczyński is a bit more supportive arguing:

“David Cameron is right. The EU is far from ideal. It tries to make everything uniform, including the working hours of British doctors, it does not value the diversity of states and nations, it does not support competitiveness. And it is increasingly undemocratic. David Cameron is correct to demand a real debate about the future of the EU. He is right to suggest that the EU has forgotten about its citizens, about their will as expressed through elections to national parliaments, and that it is comfortable making decisions behind closed doors. However, this does not mean that David Cameron is right to accept the fact that his country could in a few years leave the EU.” 

Meanwhile, in a front-page comment piece for Die Welt this morning, assistant chief editor Andrea Seibel argues:

There is 'nothing final' about the ‘Franco-German engine’ for Europe and that “the British scepticism, their non-conformity and liberalism have always also been the engine of Europe…Today a German-British axis is needed. From now on it’s not about the past anymore, but about the future of the continent.” 

Although her colleague Daniel D. Eckert was less enthused, tweeting:

“Cameron’s goals are honourable. But they only fit an EU which is conceived as a free trade zone. Euroland doesn’t function like that”. 

Elsevier's political editor Eric Vrijsen argues that:

“While David Cameron dares, [Dutch Prime Minister] Mark Rutte dives...in the Dutch coalition agreement between VVD and PvdA it is stated that the national state must regain competences back from Brussels… [but] Rutte is shying away [because] he is stuck with a coalition partner which is clearly pro-European”. 

We would note the Dutch comments on the return of powers being part of the coalition agreement are particularly interesting. We’ll have more on that, especially with rumours in the Dutch press today that Rutte could look to launch his own "balance of competencies" review.

Of all the reactions from Europe, there is one that is infinitely more important than all others…

Update - 14.10 23/01/13:

Further reactions from Germany. DPA reports that German Chancellor Angela Merkel said Germany will:

"Talk intensively with the United Kingdom about their visions in detail”

German government spokesperson Steffen Seibert added that:

"The EU need the UK and the other way round" and that changes to the UK position will need to be "discussed in Brussels together".

 ************************************************

The good thing about the debate about the UK's role in the EU - and Cameron's fever pitch speech - is that UK journalists are now forced to really read the foreign press. Hence, several of the news outlets are now running "Europe says nein, non, nej, nie" (guess the last two) etc.

The reactions from around Europe have been mixed, with a lot of predictable, and in parts understandable, muttering about "cherry-picking."

Of all the hundreds of reactions (in itself interesting), there's one that stands out. This one. From Angela Merkel (via DPA), who said she's ready to listen to the UK's wishes, if they're "fair":

"Europe also means that one should find fair compromises...Germany and me personally wishes Great Britain to remain an important part and active member of the EU".

German Foreign Minister Guido Westerwelle was slightly less positive but still accommodating saying:

"Not everything has to regulated in Brussels and by Brussels, but a policy of raisin-picking will not work"

Though German MEPs were pretty red-faced, others were more understanding. Germany’s Europe Minister for Hessen, Jörg Uwe Hahn warned against bashing Cameron, saying:

“Cameron doesn’t make this statement out of nothing…he reflects the prevalent sentiment in the UK, but also in many other countries of the European Union...the UK is the conscience that we are a decentral confederation of sovereign states based on subsidiarity, and not central federal state…the demand – that competences should not only shift unilaterally from member states to the union, but if necessary should flow back to the member states – is basically not wrong.”

Chair of Germany’s European affairs committee, Gunther Krichbaum, who has form, wasn't entirely pleased:

“I'm a bit surprised that Great Britain wants to renegotiate the rules. Britain is not a new member state, it did not just join the European Union. It had a say in negotiating all the rules and treaties. If we opened that Pandora's Box, all the pulling and hauling would start again and we would probably end up in the same spot."

Other Triple A countries also put forward interesting reactions. From the Netherlands (a country which the UK hopes will follow its lead):

Dutch MP Mark Verheijen, EU spokesman for governing VVD party highlighted some points of agreement between the UK and the Netherlands:

“We are also in favour of a lower budget and less intervention by Brussels [Cameron's speech] "showed that he wants to tackle this debate with an open attitude". 

MEP Bas Eickhout (GreenLeft) said on Twitter:

“The positive thing about Cameron’s speech: hopefully there will finally be room for Treaty change: is very much needed, only not in Cameron’s way”

And Finnish Europe Minister Alexander Stubb (who has previously warned that the UK was sidelining itself in Europe) said on Twitter:

"Cameron speech more constructive than expected. Like most of the economic principles. Disagree on deepening". Adding later, "Cameron speech clarifies things. At least we know what the Conservatives want. They want to stay in the EU. #thespeech #reluctantbride".

We'll update with reactions from the Mediterranean - which, as you might expect, have been far less receptive. 

Suggested reading material for the Commission

Bearing in mind that it is often said that someone's choice of newspapers reflects their particular political prejudices, the details of the newspaper subscriptions of the EU Commission’s spokespeople, revealed by Handelsblatt’s Ruth Berschens, are very telling indeed. Ruth writes that:

"All 32 spokespeople and their deputies read the British Financial Times, at least eleven order the French Le Monde, while six order the Italian Corriere della Sera and the Spanish El País. German papers on the other hand do not reach such lofty readership heights in Brussels. Currently not a single spokesman has a subscription to for example, the widely circulated Süddeutsche Zeitung”. 

Now of course, you can read a paper without a subscription and we're sure that the Commission keeps an eye on the German debate in various different ways. Still, it's an indication of something. While all the papers above are certainly respectable and informative, they are limited by the fact that they are all quite close to the establishment in their respective countries, and also generally afford the Commission relatively favourable coverage. Limiting your reading to the above papers will certainty not give you the widest perspective of what is really happening on the ground. There is also a great big German-sized geographical hole.
 
As Ruth herself goes on to point out, this leaves the Commission flying blind in the face of public opinion in the EU’s most crucial player: 

“How can EU officials and European politicians understand German sensibilities, if they do not speak any German and do not consult the German media? Short summaries of German newspaper article translated into English are not enough to suddenly make eurocrats experts on Germany. The flip-side of this low sensitivity to the domestic political constraints of the federal government are the completely exaggerated expectations of Germany.” 

Here are a few recent comments from the German media from the last few months that the Commission’s spokespeople may have missed: 

“Eurobonds undermine confidence in the fact that we can learn any lessons from the causes of the crisis. Athens’ sloppiness and denial would be tolerated while inaction would be seen as an attractive course in other countries. Why bother with reforms, why bother to make welfare systems, labour markets and the public sector sustainable when money will just fall from the sky?”- Florian Eder, Die Welt’s Brussels correspondent, 25th May 

“Hands off ‘Made in Germany’… this label is the envy of the world…Made in Brussels is the exact opposite – expensive regulations that shackle the economy.”- Prof. Ernst Elitz, founding director of Deutschlandradio, writing in Bild, 17th January 

"In dealing with Member States, the European Commission is rigorous. There is no measure that is too harsh when it comes to restructuring their budgets... However, when it comes to the salaries of the 45,000 EU officials, they exercise anything but restraint - this not only damages the credibility of all savings claims, but the reputation of the EU as a whole.”- Hendrik Kafsack writing in FAZ, 2nd March 

“In wanting to protect taxpayers, the UK is on the right side in the debate over bank capital rules... If Europe does not lead the way, the next crisis will again be an expensive one for taxpayers.”- Alexander Hagelücken, Süddeutsche’s economic correspondent, 4th May 

While we would encourage the Commission to go directly to the source and consult as many original German newspapers as possible, they could do far worse than signing up to our daily press summary which pulls together various sources from all over Europe…and it's free!

Is Britain the new model for Europe to follow?

Today's op-ed by Alan Posener in Die Welt caught our attention as it is among one of the most positive pieces about the UK's place in Europe that we have come across in the European media in recent times, even if Die Welt is predisposed to be positive about the UK given that it was founded by British soldiers in 1946. The piece is entitled "Great Britain is the new model for Europe", and we thought we'd extract a few key quotes:

“it is a persistent misconception to regard the British as bad Europeans. It probably is based on the fact that they stubbornly resist the logic of ‘ever closer union' such as the single currency. Now that this logic has led the eurozone into a period of sustained crisis, it is time for Europe to remember what the UK has to offer."

"in trying to make the eurozone into an alternative system to that of Anglo-Saxon capitalism we could cynically remark: have fun with setting up this alternative system of ‘regulation and solidarity’ without Great Britain but with Greece, Italy, Spain and the France of Francois Hollande. Without being cynical we have to realize that Britain is essential to Europe so that this nightmare won’t turn into reality.”

"The Anglo-Saxon tradition of both a liberal economy and society combined with remarkable economic, cultural, diplomatic and military potency, in short: a unique bond of hard and soft powers, makes Great Britain an indispensable nation in Europe and an indispensable partner for Germany. Assuming Germany wants to be more than a cash cow for Europe and Europe wants to be more than just a transfer union."  

“Protectionism, the walling off from international markets, especially financial markets, ‘solidarity’ instead of competition, ‘regulation’ instead of freedom, coupled with restrictions on immigration and xenophobia – that is the battle cry of the Old Europe… Openness to the rest of the world, the market, the strange and the new – this is the motto of the New Europe and it is nowhere more evident than in multicultural, cosmopolitan London.”

"It is not a coincidence that the British capital headquarters Europe’s financial industry. According to Eurostat more than 35% of all financial services of the EU-27 are generated in London. 90,000 Bankers work in London including 8,000 from Deutsche Bank. 251 foreign banks have their business in London. The financial service sector of the EU-27 is the world’s second largest after the United States. Not America, but Europe is the greatest exporter of financial services. This is to be accredited to London, which is the most important bridge between markets in America, Asia and Europe. If someone wants to create a Europe without the City of London, Europe will be separated from the world."

Some very stirring sentiments there, proof that there is an opening for closer Anglo-German relations, an opening the UK must take advantage of it it is serious about re-negotiating some of the terms of its membership...

Let's dare to have less Europe!

As leading UK politicians and commentators urge eurozone countries, above all Germany to take the plunge into a fully fledges fiscal and economic union (while firmly rejecting the UK’s participation), it seems they have failed to contend with quite how deep resistance to such a move might be. Indeed we are beginning to witness a bizarre spectacle in which the UK is arguing for more EU intervention while many on the continent are arguing for less, a complete turn-around from recent history.

For example, at the time of going to pixel, the homepage of Die Welt leads with a comment piece by Clemens Wergin entitled “Lets dare to have less Europe”. In the piece, he makes the sorts of arguments often made by the more nuanced EU-critical UK-based commentators, such as:

“The principle of collective responsibility should remain an exception. Therefore, we must return to a Europe in which the welfare of one nation does not depend on how others organise themselves.” 

“[The moves towards a fiscal and banking union] mean even larger intervention rights for the European institutions in national budgets. At the same time it would also mean that the inability of Italian and Greek officials to persuade their wealthy citizens to pay their taxes would be compensated by fees from the dutiful North. It would be the perfect recipe for Europe-wide organized irresponsibility.” 

“This type of deepening is not wanted by the citizens, it will not work and it drives a wedge of division into the continent. It is also further evidence of the implacability with which the political elites of the continent run in the same direction. When it comes to European issues, there is a form of ‘group-think’ that is far too rarely questioned. According to this creed, only he or she who calls for more integration can be considered to be a good European. Meanwhile, it has long been the opposite.” 

Surely these are the sort of sentiments that constructive UK EU-reformers ought to be embracing?

German media responds to ‘Super Sunday’

Following Sunday's elections in which French and Greek voters were able to have their say on their governments’ handling of the eurozone crisis, which as we’ve covered in our daily press summary, was unequivocally negative. Given the position that Germany will adopt will be the single most important factor in determining the future of the eurozone, we thought it would be worth taking a closer look at the reaction in the German press to the weekend’s results.

Starting off with Bild, Germany (and Europe’s most widely-read paper), the paper’s Greece correspondent Paul Ronzheimer argues that:

 “In a democracy, each voter has the right to decide freely. And no one wants to deny the Greeks this right. But a free choice can have consequences… About two-thirds of Greeks want to stay in the eurozone. But at the same time, they chose to vote for radical parties that reject all that is required for this membership: savings and reforms. Germany and the EU desperately need a Plan B: How can the eurozone best continue on without Greece?”

Moving onto FAZ, we have economics editor Holger Steltzner, a well established austerity hawk arguing in a piece entitled “Merkel fights alone” that:

“How do you deal with a country that firstly swindled access to the euro, then plunged the EU into an existential crisis, and then cast two-thirds of votes for radical parties that deny austerity?” 

 On Hollande, Steltzner is slightly more restrained, if still pessimistic:

“Merkel takes the debt brake seriously, Hollande does not want to submit to any rule to curb the deficit. When Merkel speaks of growth, she means structural reforms to loosen restraints on the labour or manufacturing markets. About the beneficial effects of competition (the fruits of which the German economy is currently reaping) Hollande speaks barely a word.” 

This gloomy take is also shared by the Die Welt’s foreign affairs editor Clemens Wergin who argues the election results are triumph of denial over reality, and the embodiment of “old Europe”:

“Greek and French voters have rebelled against what they perceive as German savings and reform diktats. This is however unfair when measured against the significant risks and liabilities which Germany has taken on in order to save the EU’s problem countries from bankruptcy. Likewise Germany’s fiscal capacity is significantly overestimated by those who think that Berlin should commit even more money towards Europe-wide stimulus programmes.”

Wergin continues by saying:

“While Italian PM Mario Monti is trying to implement real reforms and in the longer term adopt German-style austerity politics, it seems Hollande does not realise the enormous need for reforms that the eurozone’s problem countries are procrastinating over… Europe could cope with an irresponsible Greece committing suicide in the eurozone. Some would even welcome it. However a France that loses the confidence of financial markets would be the worst case scenario for the euro - and for Europe.”

However others strike a slightly more optimistic tone, with Die Zeit’s Gerd Appenzeller arguing that:

“In Greece, as in France, the desire is now for more growth in lieu of cuts, regardless of where the credit comes from… Francois Hollande will, nevertheless, be committed to European integration and Franco-German strength, like all other French presidents before him. In spite of this, he is not likely to make concessions with the fiscal compact and austerity plans. Indeed, Greece poses even more of a problem with its intentions to discontinue further cuts which would mean that it could be imminently bankrupt. This would ultimately endanger Greece more than the rest of Europe.” 

 Meanwhile, Handelsbaltt’s EU correspondent Ruth Berschens argues that:

“If the second largest EU state were to veer from the path of savings and reform, then the monetary union would come into its heaviest existential crisis yet. However, it does not appear that Hollande would so lightly put the euro, the most important legacy of his political mentor François Mitterrand, at risk.”

All in all then the Germans are not hitting the panic button just yet, although arguably many are clearly worried that Merkel risks becoming politically "isolated", a concept we think is far too simplistic in the context of European politics (see here and here for examples). However, it is certain that following the French and Greek results, the road ahead for the eurozone rescue is looking more bumpy than only a few days ago.

Why the 26 vs 1 narrative is simplistic (Part 2)

On Tuesday, we set out a country by country guide looking at the limited support in cabinets and parliaments around Europe for the main points of the deal agreed last week highlighting that the European match-up is far more complicated than "26 vs 1". The FT had a similar piece on its front page yesterday, and the Independent featured almost the exact same story on its front page today (which goes to show that you should sign up to our press summary if you want to stay ahead of the curve).

So what about reactions from politicans and media around Europe to the veto? To be honest, there's been quite a bit of Cameron-bashing in the European press - some justified, but there's been plenty of ranting too. It's almost as if politicans and commentators finally saw a chance to divert some attention away from the constant fire that eurozone leaders have been under since the crisis started two years ago.

But there have been a lot of more nuanced reactions. For example, as you will have heard, speaking to the Bundestag yesterday, Chancellor Merkel said that the UK will remain a strong EU partner, despite its decision not to sign up to an EU summit deal. In an interview with Rheinische Post, Frank-Walter Steinmeier, former German Foreign Minister and current parliamentary leader of the opposition SDP party said that he feared that the decisive step towards a British exit had already happened, but warned this would be a damaging scenario:

“I too am often annoyed by Britain’s special interests! But we must be aware that with the loss of Great Britain we would give up a historical element of the European integration story. I do not want to imagine writing the future of Europe without such a strong partner as the UK.”

Even Nicolas Sarkozy, who it is alleged could not even bring himself to acknowledge Cameron at the summit, struck a more concilliatory tone this week, emphasising that:

“We need Great Britain! It would be a big impoverishment to see its departure which, very happily, is not the actuality”

Unsurprisingly, the Swedish and Irish Prime Ministers, have also both indicated that there are still plenty to discuss regarding the future of Europe, and that they expected the UK to be involved in this process.

And here are some other reactions from around Europe that you won't hear on tomorrow's Today Programme:

In Poland, Arkadiusz Mularczyk, a senior MP for the Conservative Solidarna Polska party, went as far as to argue that:

"[Polish PM] Tusk should learn from Cameron's diplomacy"

A leader in Welt am Sonntag entitled: “Britain: Please come back!” argued that:

“Should the UK actually leave the EU, the Union would lose not only the cradle of European democracy, but also one of its founding members - and the most important financial centre of the old continent”.

On Monday, in Sweden's main daily Svenska Dagbladet, EU-expert Roger Älmberg wrote that:

"[Sarkozy and Merkel] Needed to identify Cameron as a scapegoat to paper over their own conflicts...the details that will emerge [from the EU deal in March] will most likely lead to more than the UK feeling excluded.”

A leader in Sweden’s largest tabloid, Expressen, noted that Cameron may have ended up outside the EU’s core structure, but that it was also “hard to find arguments” for Sweden to join Merkozy’s pact, since:

“There are no plans or political majority for joining the euro. Besides, Sweden doesn’t like that the euro countries go off on their own outside the Treaties.”

Meanwhile in Belgium, Baroness Mia Doornaert, a well-known Belgian commentator and former advisor to the former Belgian PM, Yves Leterme, argued in De Standaard:

"David Cameron says no to a new European treaty, while listening to his English voters, and is accused of being someone who "blackmails" Europe. Twenty six other government leaders and heads of state don't give their parliaments but European bureaucrats control over their budgets...this kind of top down integration carries the risk that democratic support for the Union shrinks. Europe and democracy: for now they don't seem together. Unless you consider it democracy that elected leaders in Brussels agree upon common measures which they can't or don't dare to push through in their own countries."

There was also nuanced remarks from Dutch magazine Elsevier’s EU correspondent Carla Joosten, who commented that:

"[Cameron's] fear of European rules which would hit the heart of the British economy, the financial sector in London... isn't unjustified. It wouldn't be the first time that France and Germany are trying to get rid of competition elsewhere in the Union. French President Nicolas Sarkozy keeps on repeating that the City of London is at the heart of the crisis. It isn't of course that simple. The British have already cleaned up their banking sector better than the French and the Germans together."

The Irish Independent's chief critic, Bruce Arnold yesterday wrote a piece somewhat dramatically entitled "We need to strengthen UK ties before EU strangles us", in which he argued:

"That is now overshadowed by the darker figures of Angela Merkel protecting German interests, Sarkozy protecting French interests, and doing so with greater skill and duplicity than we have seen before. David Cameron has seen what this would do to British interests and backed away. We should do the same."

This theme continued this week, with Tuesday's Handelsblatt's editorial arguing that:

"Even under normal circumstances it would have been hopeless to expect Cameron to approve the EU's conversion into a fiscal union as a first step towards political union without receiving anything to show for it at home. But given that the justification for this step was the rescue of a currency the logic of which the British still doubt today it was utterly impossible…It would be better now to focus on what the two sides still have in common and what can serve both their interests instead of ranting against the Britsh. And a functioning common market is right at the top of the list here."

While worrying about the UK’s ‘departure’ an editorial in El Pais claimed that:

"From development cooperation to a European research area, many European projects would look very different today without the UK's influence. And it's difficult to imagine that without the UK the EU would have dared to break up hugely influential national monopolies like the telephone companies or airlines. If the UK leaves, the EU will lose not only military, academic and financial clout but also a country that has demonstrated that it is much better able to renew its public administration and policies than continental Europe"

Spanish regional paper Las Provincias argued that:

“Despite doubts, the UK contributes much to the EU in economic and political reforms, and one should avoid reading the pact as a new battle between Europeans, with winners and losers.”

In this week's Spiegel magazine, London correspondent Marco Evers criticises Cameron’s decision to veto EU Treaty change, but concludes that:

“Despite all the anger, [the British] might soon be missed… ironically enough, it might just be the Germans who regret losing the United Kingdom. London's dedication to free trade, to the rule of law and to having things run in an orderly manner is not so easy to replace. Berlin is losing a partner who was a dependable counterweight to the club of those slack states in southern Europe whose freewheeling financial policies the restrained Germans have always abhorred.”

All in all then, to paraphrase Mark Twain slightly, it could be said that reports of the UK’s death in Europe have been greatly exaggerated.