Posted by: Ben Vickers on November 28, 2011
Germany’s latest strategy for resolving the euro crisis has been emerging over the past few days. It will stand its first test tomorrow when euro-area finance ministers gather in Brussels to prepare a leaders’ summit for Dec. 9.
Chancellor Angela Merkel and French President Nicolas Sarkozy propose that a number of euro-zone members join a coalition that adopts strict fiscal rules, according to Germany’s Welt am Sontag newspaper. This coalition could be formed by a fast-track stability pact that would require changes to the Lisbon Treaty—and Germany is working to convince members of Europe’s Parliament that this would be possible without convening all EU members to a lengthy convention, Brian Parkin and Mark Deen report.
This solution skirts the issue of delays that would be incurred by involving all euro members—but, as critics have been quick to suggest, it may split the euro zone, formalizing the concepts of core and peripheral members.
Luxembourg’s Jean-Claude Juncker , who leads the group of finance chiefs, said that the EU shouldn’t be “artificially divided” into two groups, while Finnish Prime Minister Jyrki Katainen said that “it isn’t at all certain” if there is wider support for Germany’s stance.
Still, it appears Germany may force a choice upon euro members: either sign up for fiscal discipline and adjust your laws to avoid budget overruns now, or be left on the outside of the fiscal union to make your own way in the capital markets.
Photographer: Chris Ratcliffe\Bloomberg