Merkel relief at 'good day for Europe'

 
Angela Merkel Chancellor Angela Merkel, speaking at the Bundestag, welcomed the ruling

Chancellor Merkel stood before the ranks of the Bundestag yesterday and declared it "a good day for Europe".

The German Constitutional Court had just given the green light for the ESM - the eurozone's permanent bailout fund - to go ahead.

So it was possible to deploy yet another weapon in fighting the eurozone crisis. The ESM - with a 500bn-euro (£400bn) war chest - will handle future bailouts.

So several obstacles that might have spooked the markets have been cleared from the path. Some European officials - who last year declared the crisis over - are hopeful once again.

It helped that the Dutch electorate, at the last moment, shied away from backing parties openly critical of the centralising power of Brussels.

The days of unbending austerity are over in Europe. Officials and leaders are operating on flexi-time.

The ECB was given the nod from Berlin to agree to buy unlimited bonds of those countries in trouble.

Portugal, unable to meet its targets, has been given more time.

If Spain applies for a full bailout there are powerful voices saying no new conditions will be necessary. The promise that help comes with "strict conditionality" may not be kept.

Greece is certainly being told it must live up to its commitments, but talk of a Greek exit from the eurozone has suddenly disappeared from political circles in Berlin. Chancellor Merkel will not sanction it.

More Europe?

Suddenly there is the glimpse of a looser monetary policy, of targets relaxed and of debt being mutualised.

Ironically the key to this is national politics. There is now just over a year until elections in Germany. Chancellor Merkel does not want the eurozone crisis to dominate the campaign. That may be wishful thinking but compromise is the word of the moment.

The eurozone crisis - as widely predicted - is being used to justify deeper integration. President Barroso is calling for "a federation of nation states". Mrs Merkel is signed up for "more Europe".

The danger in this is that Europe will turn inward, obsessed by its own structures, unleashing intense debate about the Europe of the future. President Barroso hints at treaty change by 2014.

Selling more Europe will be a difficult task when the polls suggest increasing alienation from the European project.

In the meantime there is the real economy. There are over 24m people out of work. Recession, in some countries, is deepening. Debt is still climbing, growth elusive.

In some countries, like Greece, Spain and Italy consensus is fragile. There are some green shoots: exports to countries outside Europe are increasing and some competitiveness is returning.

So "A Good Day For Europe" - perhaps. But not yet for the real economy. And that is where Europe will be judged.

 
Gavin Hewitt Article written by Gavin Hewitt Gavin Hewitt Europe editor

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  • rate this
    +2

    Comment number 57.

    Art. 30.1 ESM members shall be immune from legal proceedings with respect to their acts & shall enjoy inviolability in respect of their official papers & documents.
    No responsibility, inviolable documents - does this not seem that we have become (once again) the playthings of the bankstas?
    Surely, these provocative "articles" will be challenged when govts change hands?

  • rate this
    +3

    Comment number 56.

    53.Dailymailreader
    I'm sure all will be delighted that Mr Barrosso anounced a 500 million donation for the Muslim Brotherhood in Egypt, can't think of a better way to waste EU taxpayers money.
    ++++


    Excuse me, but what do you have against Ansar al Sharia in Libya?

    Or al-Qaeda in Yemen?

    They need big donations too.

    [do you know what reliable weapons and explosives cost these days?!]

  • rate this
    +2

    Comment number 55.

    One would expect Mrss Merkel's relief in case of the court's passing the opposite judgment on ESM. Now she has to make a decision. The future of Germany's staying in the Eurozone is really a pure political question.

  • rate this
    0

    Comment number 54.

    41.austriacus

    ( sorry, it is spelled Hawaii of course )
    +++

    Well, its' actually Hawai'i.

    Where I've never met anybody who'd claim that Hawai'i was better off before becoming a US state, nor anybody who'd claim they've been worse off because of that.

    Btw. You can hardly find more patriotic Americans that Hawaians.

    Certainly not after Pearl Harbor.

    Now, 'bout Puerto Rico... :-)

  • rate this
    +4

    Comment number 53.

    I'm sure all will be delighted that Mr Barrosso anounced a 500 million donation for the Muslim Brotherhood in Egypt, can't think of a better way to waste EU taxpayers money.

  • rate this
    -1

    Comment number 52.

    Expatde

    No, you misunderstood me. I meant Hewitt. Not you. We’re just commenters. He’s a BBC Editor. If I’m disgruntled, it’s because innuendos don’t help us find solutions. Whatever a journalist comments on, it's her/his duty to quote credible sources. Otherwise it’s just lobbyism. There’s already plenty of it. We’d need less, not more. There are House Rules for journalism too.

  • rate this
    +3

    Comment number 51.

    A good day for EU?
    Art. 27.4 The property, funding & assets of the ESM shall be immune from search, requisition, confiscation, expropriation or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.
    I already mentioned this before. But also our governments, our administrations & our democratic laws seem without rights against the ESM?

  • rate this
    +4

    Comment number 50.

    Treaty change, Referendum............
    Bring it on

  • rate this
    +2

    Comment number 49.

    77RA I am sure you are trying to make a valid point but you just look silly. Disgruntled ex-employee? My facts source is simple. I live in Germany, read German Financials, read German Newspapers and watch German TV.

  • rate this
    +2

    Comment number 48.

    A good day for EU? ESM:
    Art. 10.1 Board of Governors may decide to change authorised capital stock….Is 700B just the start? ESM can demand more with a simple request & we are then obliged to pay -according to article 9 –irrevocably & unconditionally?
    Art. 27.3 The ESM -property, funding, assets - shall enjoy immunity from judicial process…ESM can indict others, but cannot be indicted?

  • rate this
    -2

    Comment number 47.

    @ 45

    "If you wish to comment at least read the facts."

    and quote sources. You mean Hewitt, don’t you ? Cui prodest ?

  • rate this
    +3

    Comment number 46.

    A good day for Europe?
    European Stability Mechanism. (ESM):
    Art. 8 The founding capital is 700B euros.
    Art. 9.3 ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them … to be paid within 7 days of receipt.
    What means: "unconditional and irrevocable?"
    When a new parliament is elected, what if they decide enough, no more?

  • rate this
    +3

    Comment number 45.

    @quietoaktree, Yes it is Limited, it was a constitutional Internal Issue, questioning if current laws in Germany allowed Germany to provide money for the ESM. If you wish to comment at least read the facts. Personally I am sick of seeing my hard earned Taxes go the these lazy badly managed countries. We need a super Euro Zone, Germany, France and the rest out.

  • rate this
    -2

    Comment number 44.

    No QOT … You’re right. That’s just Hewitt. But careful if you say he’s not a journalist, just a lobbyist ( together with others here ) … You get the BBC censorship. Give us better journalism. Hewitt … Go on holiday.

  • rate this
    +2

    Comment number 43.

    "The ECB was given the nod from Berlin to agree to buy unlimited bonds of those countries in trouble." ???

    The German court gave their decision on the ESM --that is limited !

    -- please correct me if I am wrong!

  • rate this
    +1

    Comment number 42.

    ESM?
    Europeans would be better off to reverse article 123 of the Lisbon treaty. ECB could then issue credit directly to its Govts, or EU govts could re-establish their economic sovereignty by reviving their publicly-owned central banks & using them to issue the credit of the nation for the benefit of the nation.
    Idea was used (to very good effect) e.g. in Canada through the Bank of Canada.

  • rate this
    0

    Comment number 41.

    ( sorry, it is spelled Hawaii of course )

  • rate this
    0

    Comment number 40.

    @31
    PMK,
    I'm confused, I'm sure I read an article here that for every dollar CA pays in fed taxes it receives $1.40 in fed payments making it a net receiver. The article below thinks Greece can be solved the same as Mississippi
    http://www.theatlantic.com/business/archive/2012/05/the-difference-between-the-us-and-europe-in-1-graph/256857/

  • rate this
    +3

    Comment number 39.

    Good for Europe?

    Yeah? For whom in Europe?

    It isn't good for the people in EZ nation states who see unemployment soaring, reductions in services, higher taxes & throwing good money after bad.

    And for what?

    To perpetuate the vanity project of European bankers and political elite.

    Hilarious that this capitalist globalist power crazed shangri la is supported by liberals and socialists.

  • rate this
    +3

    Comment number 38.

    At least ECB was working under supervision of ELECTED GOVT; we would have some say when we elected govts. But back into the hands of bankers? It seems to me that Goldman former exec & financial technocrats have taken over EU. Are Europeans being fooled into relinquishing their sovereign democracy to financial bankstas (again)?

 

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