Il Principe

by Andrew Stuttaford

Spiegel Online discusses Merkel’s blink:

This is not the first time that Merkel has surrendered what had been repeatedly heralded as Germany’s final line in the sand. Every step of the campaign to rescue the euro over the last two years has gone from being a taboo to a done-deal that triggers massive public outrage. Indeed, one could even go further and say that the entire history of European integration has been a series of broken taboos.

What’s more, in this game of high-stakes negotiations lasting until 4 o’clock in the morning, Merkel was also holding what were simply bad cards. She urgently needed her counterparts to agree to the growth pact if she was to have any chance of having Germany’s parliament, the Bundestag, approve her fiscal pact in a vote scheduled for Friday evening. Time was short, and she needed an agreement. Knowing this, [Italian prime minister] Monti laid his dagger on her chest.

Impressive. Well played, Mario. Even more so as the ‘growth pact’ (itself designed to give to cover to various European politicians on the left in return for their own agreement—for now—to go along with austerity) doesn’t amount to a hill of fagioli in the EU’s crazy currency union.  €120 billion? Chump change, these days. And only about half of that is immediately available anyway.

That said, as the article also notes, Merkel’s concession has left her with plenty of room for further maneuver. The question is how much of it she will take.