Leadership at last?

16 September 2011 By Pierre Briançon

Berlin’s attitude towards the euro zone has become more positive, and less inconsistent, in recent weeks. Its partners should welcome the change and be encouraged. Germany, however, is still to fully appreciate that austerity for all will mean recession for everyone.

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European finance ministers on Sept. 16 will begin a two-day meeting in Poland that will be mostly focused on the euro zone debt crisis and the next steps they need to take to calm markets.

U.S. Treasury Secretary Tim Geithner has been invited to take part in the meeting and is expected to suggest to his European counterparts the possibility of leveraging the European Financial Stability Facility (EFSF) to give it more fire power.

German Chancellor Angela Merkel on Sept. 15 once again rejected the idea of so-called “euro bonds”. “In order to bring about common interest rates, you need similar competitiveness levels, similar budget situations. You don’t get them by collectivising debts”, she said.

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