The clash between Berlin and Brussels reached its climax the other day, after the European Commission presented its project for the introduction of CDs. Eurobonds. With it, even the decisions taken last October 26 in the European capital by the Franco-German directorate seemed outdated. The federal government has been denying for months that a federalization of debt could be the right path, not only because there would be a leveling of interest rates upwards compared to Germany, but also because it would risk completely canceling the reform efforts in the countries peripheral. For the same reasons, the ECB´s outstretched entry into the sovereign bond market would not be subject to negotiation, such as to guarantee a potentially unlimited purchase of bonds that investors no longer want to buy.
In reality the German position it's more multifaceted internally than what is documented abroad. Mrs Merkel's ambiguities are due both to her typical governmental style and to the split within the yellow-black majority. Intolerance towards the bailout policy increases in both Christian Democrat and liberal ranks. On the other hand, among other deputies, awareness is growing that only a correction of the institutional architecture of the Eurozone as conceived in the XNUMXs can actually save the single currency and avoid the collapse of the single market as well. A correction with which you modify i.e. the atypical task assigned to the ECB and create, even if only partially, a European public debt. At the same time, however, as the triple A countries are asking, it is necessary to ensure greater coordination of economic policies, possibly reducing the sovereignty of the most undisciplined countries. So far Merkel´s pro-European game has been played only on the latter front, fueling the resentments of the Mediterranean countries overwhelmed by the recession.
In more skeptical parliamentary circles towards this strategy we begin to speak ironically of the "OccupyEurope" operation by Berlin, responsible for the sudden changes of government in Italy and Greece. This is why some more pragmatic Christian Democrats and very close to the Chancellor, including Peter Altmaier and Norbert Barthle, do not completely close the door to emergency solutions. The contradictions of the German government were also recently underlined by the Social Democrat president Sigmar Gabriel, who provocatively highlighted how the Transferunion so much opposed by liberals and Christian Democrats actually already exists: the EFSF on the one hand and the purchases on the secondary market of the ECB on the other hand are the first step taken in this direction.
also the two confederal business organisations, BDI and BDA, worried by a collapse in exports to the Eurozone, seem intent on defending the euro at all costs, supporting the slow and progressive maturation of Mrs. Merkel, who has so far always given in to requests of those who asked for "more Europe". In the offices of Bundestag is rumored indeed that Eurobonds o debt monetization are now a matter of weeks. More and more German economists, not least Deutsche Bank chief economist Thomas Meyer, believe that the ECB is the only institution capable of stemming the climate of distrust in the markets.
At the moment Mario Draghi he has shown himself to be prudent and sensitive to German needs, but it is not excluded that, with the go-ahead from the Chancellor, he may change his mind. In that case, theFDP, the liberal party, would be ready to bring down the government. Even if, given the low level of consensus he currently enjoys, it is probable that he will once again be forced to compromise, in order to avoid the polls. Obviously, the question remains as to what will decide the Constitutional Court of Karlsruhe, whose last sentence of the first days of September would seem to have ruled out recourse to Eurobonds.
