Mrs Merkel repeated her opposition to stability bonds at a meeting today with her French and Italian counterparts and emphasised again that the ECB has no part to play in fiscal policy. The markets responded by tearing off south.
However, Germany has been shaken by the failure to sell all the sovereign debt it auctioned earlier this week and the realisation that it is no use having a strong export economy should conditions in other countries reduce demand. Spiegel Online suggests that opposition to debt pooling (stability bonds) may be 'shrinking'.
It is 'a no-brainer' to think that Germany is holding out for ever closer union, indeed fiscal and political union as the price to be paid for granting the ECB greater powers and agreeing to stability bonds. The current insistence on the EC monitoring the fiscal position in individual countries and seeking the imposition of penalties for countries which do not follow fiscal policies is but a staging post.
Discussion has moved on to the structure of the 'new' Europe - how it will achieve democratic legitimacy, how the EC will be reigned in and the division of federal and state powers.
In the UK much of the antipathy towards the EU centres on the issues of democratic deficit, the EC bureaucracy and the slow and the apparently unstoppable accretion of power to the EU by extending the remit of competencies. Should the 'new' Europe resolve these issues, what then of UK membership?
http://www.telegraph.co.uk/finance/financialcrisis/8911846/One-nation-could-leave-euro-says-BoEs-David-Miles.html
http://www.spiegel.de/international/germany/0,1518,799550,00.html
A complete disaster.
http://www.telegraph.co.uk/finance/financialcrisis/8911914/German-bonds-under-pressure-as-Merkel-Sarokzy-and-Monti-prepare-meet-for-debt-crisis-talks.html
http://www.bbc.co.uk/news/business-15867847
France and Germany plan changes to EU treaties.
http://www.spiegel.de/international/business/0,1518,799692,00.html
German resistance to debt pooling may be sinking.
http://www.spiegel.de/international/europe/0,1518,799719,00.html
The crisis has hit the entire core of the eurozone.
http://www.spiegel.de/international/europe/0,1518,799292,00.html
The great leap foward: in search of a united Europe.
http://www.telegraph.co.uk/finance/comment/jeremy-warner/8913884/Death-of-a-currency-as-eurogeddon-approaches.html
Eurogedden!! A must read
http://blogs.telegraph.co.uk/finance/ianmcowie/100013425/x-rated-bond-crisis-in-berlin-and-a-bridge-too-far/
http://www.telegraph.co.uk/finance/financialcrisis/8914163/Germany-unmoved-by-French-pleas-for-more-ECB-action.html
http://www.telegraph.co.uk/finance/financialcrisis/8914192/Andrew-Bailey-UK-banks-must-brace-themselves-for-euro-break-up.html
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