France assumes a less active role than the German country in the management of the crisis
The German Chancellor, Angela Merkel, keeps the entire European Union and its international partners in suspense. The finance ministers of the eurozone met yesterday in Brussels to try to resolve the discrepancies on how to provide greater strength to the rescue fund of the euro face the double summit of heads of State and Government of 23 and 26 of October. The omens, for now, are black, because the Franco-German axis agrees on the need for a long-term solution, but the disagreement on how to carry it out in the short term is acute.
After giving the green light to the delivery of 8,000 million euros of the sixth tranche of aid to Greece, the center of attention has now moved to Italy, who is being asked for further structural reforms. As usual, the only one that showed keeping the reins under control was yesterday the ECB, who, through a new purchase of sovereign debt, gave a respite to the markets.
In front of a French president, Nicolas Sarkozy , who met yesterday with a new warning from S & P and sees its triple-A in danger without finding understanding among its European partners, Merkel admitted yesterday that a Greek debt cancellation is necessarily greater than initially calculated, of 21%, despite the fact that French banks are precisely the most exposed.
In addition, according to sources close to the German government, Berlin would like to improve the troika system – formed by the IMF, the ECB and the EU – to monitor countries under budget control such as Greece, Portugal and Ireland and advocates that these supervisors also act in countries with debt tensions such as Italy and Spain. “This troika system that gives its opinion every three months causes us too much stress, we need a much more permanent accompaniment solution, which allows us to adapt much more quickly” to the aid devices, the same sources assure.
With this scenario, the vision of the Luxembourg Prime Minister and President of the Eurogroup, Jean-Claude Juncker, is devastating. “The image we are giving is disastrous, we are not giving an example of good governance,” he lamented. Faced with the lack of solutions to offer its international partners, who are pressing it more and more, the European Union was forced yesterday to also cancel its annual summit with China, scheduled for October 25. And the pressure to achieve a credible response is added to the calendar issues: everything must be closed for the G-20 meeting on November 3 and 4 in Cannes (France).
As an uncomfortable guest, the Managing Director of the International Monetary Fund, Christine Lagarde, was also present at the Eurogroup. She stood in Brussels, assuring us that her goal is to “do everything we can to help the Europeans”, but all are well known for their dissensions. about the way in which the Eurogroup is facing the problems.
The European Commission and the Netherlands made clear yesterday a new step towards Italy, one of the countries victims of the attacks of speculators against their debt, together with Spain. “We expect Italy to clearly reiterate its budget consolidation and structural reform projects on Sunday,” said Commissioner Olli Rehn.
The economic vice president of the Government, Elena Salgado, for her part, again denied that Spain is in the same group and has to adopt more adjustment measures to satisfy its European partners.
The French Finance Minister, François Baroin, called for a “strong, powerful and sustainable” response to stabilize the eurozone, consisting of a strengthening of the EFSF to serve as “an authentic firewall that protects against all contagion.” “We work hard to achieve a solution that is presentable to the heads of state,” he stressed, dodging entering the heart of the confrontation: how to give more power to shock the 440,000 million fund.
Spain agrees with Paris on the usefulness of the ECB to leverage the fund, but knows that, with the opposition of Germany, is unrealistic. “In an ideal world, it would be good if the ECB had a more active role, but I think that in the area of what is feasible, we must also consider other possibilities,” acknowledged Elena Salgado.
Finally, the finance ministers of the eurozone and the International Monetary Fund yesterday approved to unblock the payment of the next tranche of financial support to Greece, for the amount of 8,000 million euros. That amount corresponds to the sixth tranche of a total package of 110 billion euros of loans agreed between the EU, the IMF and Greece in May last year. Without this disbursement of resources, Greece was faced with a suspension of the payment of its debt in the short term.