Europe: Technocrats Run to the Rescue

Merkozy’s Men: Advisers Seek to Bridge Euro Differences – SPIEGEL ONLINE – News – International.

Europe is running out of time and two unheard-of advisers have teamed their efforts to narrow the differences between the two major partners: France and Germany. As Spiegel notes, the alliance of Merkel and Sarkozy has become so tight that they are dubbed as one: Merkozy.

But some believe that it is Germany that calls the shots:

Dinner for One?

Nonetheless, butlers can be very influential. Just ask Anthony Hopkins.

The two points of view:

The French see an approaching catastrophe, the danger of contagion and the threat of the euro crisis spilling over across the entire euro zone. They see fire and want to call the fire department — in other words, the European Central Bank (ECB) — to put it out and to pump fresh money into the system. They view euro bonds, for which all of the 17 euro-zone states would be jointly liable, as an alternative.

The Germans hold little regard for either idea. Euro bonds would make all states collectively liable for the debts of individual states, and that is not a move Berlin has supported. Likewise, the Germans perceive the danger of the crisis spilling over into other countries as being smaller than the French do. They want to combat the crisis at the root level, and they believe that the euro zone will only win back trust if the countries that are part of it were to stop living beyond their means.

The difference is that while the German economy is still growing, the French is close to zero growth. German-style austerity could push France into a recession.

Thereof the proposed agreement for the suppression of sovereignty that the UK vetoed last month and then became the central piece in a treaty – outside the European Union framework – designed to circumvent the British blockade. London is out to protect The City and its quasi unregulated financial practices.

The latter agreement is now pending acceptance in several European parliaments.