Saying 'Nein' To Angie

Last week's EU summit, saw the Franco-German "pact for competitiveness" - a raft of proposed rules on wages, pensions, spending and taxation to strenghten discipline in the eurozone - run into some serious opposition. Not surprising given that the plan effectively demanded that permanent, cast-iron rules, rather than votes in democratically elected national parliaments, determine key policies on spending, taxation and pensions across the eurozone.

Mariano Rajoy, leader of the Spanish opposition Partido Popular, summarised the underlying problem: “As a Spaniard, I don’t like to be told what I have to do by outsiders”.

Both the content (such as breaking the link between wages and inflation) and the process (France and Germany hammering out a deal behind closed doors with little input from anyone else) caused plenty of mutters from the other EU leaders.

The Merkel-dominated plan would lay down the new economic rules in exchange for injecting more money into the eurozone's rescue fund, but is now unlikely to be adopted in full.

Here is a round-up of what the press in the so-called 'peripheral' eurozone countries - the politically correct epithet for PIIGS - said last week about Iron Angie's ultimatim.

An article in Greek left-liberal newspaper To Ethnos argued,

The way in which decisions are being forced through in the states of the Eurozone and EU nowadays is nothing short of a coup d' état. One may or may not agree with Merkel's proposals [...] But what is absolutely unacceptable is this method of foisting these measures on the states.

In Spain, an editorial in El País criticised plans to keep salary increases below the level of inflation and argued,

The Spanish economy needs to change its growth pattern; save more and increase productivity. To achieve this, many changes are needed, and one can also discuss what Merkel proposes. But in the end, each country must choose its own formula to boost productivity.

Another Spanish daily, La Vanguardia, simply stated,

[A common] European economic policy is running. Angela Merkel is driving it.

An article in Italy's top financial newspaper Il Sole 24 Ore noted,

If all goes well, the Franco-German pact for growth and competitiveness will not make any mention of imbalance corrections for countries running excessive trade surpluses: no mention of the fact that Germany might be forced to boost its internal demand to favour growth in the rest of Europe. However, a blueprint will be provided for the gradual Germanisation of Europe [...] In other words, the European economic government always invoked by France, but all in German sauce [...] Will other eurozone countries follow? Bets are open, but if they want to stay in the euro area they will not have much choice.

In Le Figaro, Chief International Economy reporter Alexandrine Bouilhet described the Franco-German proposal as the “tree hiding the forest” , arguing,

The markets listen to it with only half an ear, not to say that they are indifferent. They are only waiting for one thing: fresh money on the table to avoid a Spanish collapse. The rest is nothing but political window-dressing made of promises that only bind those who made them…”

Chapeau!