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, Europe editor Article written by Gavin Hewitt Gavin Hewitt Europe editor


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  • rate this

    Comment number 97.

    #82 dmr

    "but like all other idealogies, Communism, Fascism etc it's blinkered view will not even acknowledge criticism or desent, as it's converts on this blog show."

    --you forgot British Feudalism !

  • rate this

    Comment number 96.

    I would recommend reading Gunnar Beck's article in The Guardian of Sept 9th: "Germans could be consigned to serfdom to save the euro".
    Clearly the last question can now be answered with "No, Karlsruhe does not take itself and the German voter seriously any longer." With 54% (and rising) of Germans against ESM support for both euro and EU will start to erode- sooner rather than later. A good day???

  • rate this

    Comment number 95.

    Once again the frugal are forced the bear the burdens of the wastrels for the the profits of the moneylenders.

    How about we void all debt and declare lending with interest a capital offense. There is historical precedent for calling all forms of interest usury.

  • rate this

    Comment number 94.

    they've improved their sticking plasters but failed to tackle the fundamental issues underlying their problems - how to effectively manage their asymmetric currency space so that ALL (or at least the vast majority of) the people in it can live "reasonable" lives

  • rate this

    Comment number 93.


    You may find it hard to believe but despite being to Vienna a dozen times I finaly got to visit Schonbrunn only 2 years ago.

    Didn't care too much about insides but I found its gardens lovely.

    [you can see pertinent photos as well as those from Graz in my gallery at or at specific locations in Google Earth]

  • rate this

    Comment number 92.

    You are communicating with a very old kitten :-)

    But You are right in one respect:

    the EURO can fail.

    So with a joint effort from its adversaries ...

  • rate this

    Comment number 91.

    austriacus: "And I feel that my country is better off within the Eurozone than outside."

    With you country still doing much better than many much bigger EZ member-states I don't blame you.

    My original point was: only time would tell what was ultimately right.

    Pointing out that many of today's eurosceptics are yesterday's
    euroenthusiasts. [like kittens: blind at birth but later ...]

  • rate this

    Comment number 90.

    P. s.:

    the EU Exit door is always open.

  • rate this

    Comment number 89.

    "I also don`t know a single German or Austrian who is in support of it."

    Obviously the 2 of us have not managed to meet.

    "I also expect the FPÖ to win the next elections in Austria."

    In view of the the FPK's problems in Carinthia I have my doubts.

  • rate this

    Comment number 88.

    "If we’d cut on wars … we’d save much more."

    Funny since so many claim US invaded this or that country "to steal their oil". [including countries which have no oil, like, e.g., Afghanistan]

    While buying their oil on the free market would be much cheaper than any military operation.

  • rate this

    Comment number 87.

    Off Off Off

    Waste of time.

    Suprematists … Bang your heads against the wall.

  • rate this

    Comment number 86.

    An MEP yesterday stated that

    within 30 years time no single country of Europe will be part of the

    This should ring bells somewhere.

  • rate this

    Comment number 85.

    @84 77RA
    "Luxemburg, Holland & Austria backed the Draghi - Merkel Plan. So did Germany"

    I am a German living in Vienna. And let me tell you that there is a very serious debate in both countries with opinion polls in both countries being completely against Draghi. I also don`t know a single German or Austrian who is in support of it.
    I also expect the FPÖ to win the next elections in Austria.

  • rate this

    Comment number 84.

    Besides … Bumstead

    As you may be know … ALL your super-mates Finland, Luxemburg, Holland & Austria backed the Draghi - Merkel Plan. So did Germany, but Buba Weidmann.

    And … As you may be know, Wilders’ PVV has lost almost half its seats — yesterday. You know … There’s hope you just belong to a minor minority.

  • rate this

    Comment number 83.

    80. David Horton

    ''The law states that such a treaty will precipitate a referendum here in Britain ''

    But they won't !

    they will say that we didn't understnad what they meant
    There is no new treaty
    its the wrong type of treaty
    or they had their fingers crossed

    What ever

    We will not get that referendum !

  • rate this

    Comment number 82.

    It may well be that Hawai'i ( must get used to that spelling ) is better off now, being part of the US.

    My argument was exactly that they felt "that their small country could only benefit by joining a much bigger and stronger entity." as You phrased it.
    I did not doubt their happiness with the US.

    And I feel that my country is better off within the Eurozone than outside.

  • rate this

    Comment number 81.

    Like all idealogies, the EU wants to export it's world view to all it can bribe,
    but like all other idealogies, Communism, Fascism etc it's blinkered view will not even acknowledge criticism or desent, as it's converts on this blog show.

  • rate this

    Comment number 80.

    Delighted that Barroso has called for the EU to evolve into a federation of nation-states during 2014 because he says that this will require a new treaty

    The law states that such a treaty will precipitate a referendum here in Britain.

    The British will say "no"
    The EU must then either drop the treaty or kick us out
    Hopefully the latter.

  • rate this

    Comment number 79.

    @ 75
    The UK in their long history have never tried to consolidate democracy. Double standards ? UKIP amnesia ?

    @ 77
    I don’t even want to read why France or others don’t belong to your elite group. But. Try ! I’ll be quite happy to be left with the others … Racism has deep roots. Want more on the Marshall Plan … Bumstead ?

    I won’t waste my time to discuss with racists … Bumstead

  • rate this

    Comment number 78.

    And the Draghi - Merkel Plan ( if it works ) could even be more remarkable than the Marshall Plan, because, anyway, the Marshall Plan started at the onset of the Cold War. The context is different now, there’s competition but nothing akin to the Cold War among USA, EU, UK, BRIC, South Korea, Taiwan.


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