What actually happened in Berlin

By: Wolfgang Munchau

Reader of Eurointelligence in the last two days might be thorough confused. On Monday, we reported in our Daily Morning News Briefing that France is proposing a Euro Area summit, and that Germany is "open" to it. This was a direct quote from the government's deputy spokesman, and was reported by FT Deutschland and Reuters. On Tuesday, Angela Merkel held a news conference, in which she effectively says that such a summit is both unnecessary and divisive. So what happened? Did they change their mind? Did the deputy spokesman speak out of turn?

 

It is my understanding that Berlin would not reject a French invitation to a Euro Area summit. But Merkel would very much like to kill the whole idea beforehand.

 

It is interesting how nine years of joint euro area experience have failed to make any inroads into national debates in the two countries. Germany and France remain as far apart as ever. Sarkozy, and large parts of the French elites, still cannot come to terms with an independent central bank. And Germany still believes that macroeconomic policy can be reduced to an independent monetary authority in sole pursuit of price stability, and fiscal discipline. Both positions are utterly unreasonable.

 

So what about a euro area summit? As I said in my FT Deutschland column on Wednesday, I would favour a summit as long as it is well prepared, confined to only a few clearly delineated subjects, such as external representation, and no Sarkozy publicity stunts. We are probably not very likely to get such a summit, and I have some sympathies for the argument that a bad summit is probably worse than no summit.

 

Interesting also is the fact that Le Figaro, who was told the news of the planned euro area summit by PM Fillon in an interview, did not bother to report the news (or at least we did not find the story). That may reflect on the low importance the French conservatives elite attach to this subject.

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