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Wednesday, February 09, 2011

Saying 'Nein' To Angie - Part II

We've already looked at the reaction from some of the European press to the Franco-German "pact for competitiveness". But what about European leaders? Well, as has been widely reported, Paris and Berlin may find it a bit more difficult than usual to get their way.

Possibly the toughest reaction came from non-euro member Poland, whose PM Donald Tusk "personally attacked" German Chancellor Angela Merkel and expressed “fundamental doubts” about her plans, according to Spiegel. Going all out, he added:
Why do you have to demonstrate a division? Are the rest of us standing in your way?
Belgian Prime Minister Yves Leterme said on his arrival at Friday's summit that he was "absolutely not in agreement" with the idea of scrapping the link between pay rises and inflation, and warned,
We will not allow our social model to be undone.
Luxembourg's Prime Minister Jean-Claude Juncker concurred,
I can't really find a reason why abolishing the indexation of wages should improve the competitiveness of my country or the euro area.
Austrian Chancellor Werner Faymann, a known supporter of German-style fiscal discipline, bluntly stated,
I don't even think it's possible that the EU sets the retirement age.
Predictably, Greece also voiced its disapproval, not quite appreciating the idea of a constitutional limit to government borrowing - the already infamous "debt brake". In an interview with Ta Nea, Greek Deputy Prime Minister Theodoros Pangalos said,
I categorically reject the thought of an EU decision to intervene in national constitutions. The idea that this would be a precondition for being a part of the German rescue plan is not attractive to me.
European Council President Herman Van Rompuy will now try to find a compromise, suitable to all eurozone leaders. An extra eurozone summit is planned, possibly for March 11, then the aim is to have a deal ready at the EU summit by the end of March.

Bonne Chance.

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