Predicting what Germany will do in a negotiation is fast becoming the Brussels equivalent of soothsaying. Tuesday’s tetchy banking union talks set off yet another diplomatic stampede to consult the ouija boards, throwing canes and tarot cards in order to find out what Berlin really wants.
Were the strident objections of Wolfgang Schäuble, the German finance minister, just negotiating tactics? A manifestation of German domestic politics? Or are they red lines that will require the reforms to create a single banking supervisor to be totally recast or significantly delayed? We’ve consulted the FT Brussels Blog Oracle (and a few diplomats) to draw up these two scenarios.
The Germans are digging in: no deal this year
There was genuine shock at Schäuble’s intervention. Ahead of Tuesday’s meeting of finance ministers, four EU ambassadors predicted to us that a deal — or partial agreement — was at hand. That was until Schäuble spoke. He opened with a dispute that officials thought was close to being resolved: whether small banks fall under the ECB’s supervision responsibilities. Don’t think this will pass the German parliament, he warned.
More worrying for some was his next point. Read more
With all eyes on Europe’s last-ditch efforts to save the eurozone from collapse, it is hardly surprising that a thoughtful, 46-page report on the European Union’s long-term future has gone almost completely unnoticed. But the study, commissioned by EU heads of state and government in 2007 and published last weekend, is worth taking a look at.
It was written by a group of 12 experts led by Felipe González, the former Spanish premier, and including Mario Monti, the distinguished former EU commissioner, Jorma Ollila, chairman of Finland’s Nokia mobile phone company, and Lech Walesa, the ex-Polish president and hero of the opposition Solidarity movement in communist times. There was a good mix of northern, southern, western and eastern Europe on the panel.
They begin with a disturbing observation: “Our findings are neither reassuring to the Union nor to our citizens: a global economic crisis; states coming to the rescue of banks; ageing populations threatening the competitiveness of our economies and the sustainability of our social models; downward pressure on costs and wages; the challenges of climate change and increasing energy dependence; and the eastward shift in the global distribution of production and savings. And on top of this, the threats of terrorism, organised crime and the proliferation of weapons of mass destruction hang over us.” Read more