Economic crisis: Iron chancellor will have her way
3 March 2011
Angela Merkel is not for turning, and her European partners are increasingly jittery. “Kenny bailout blow,” headlines the Irish Independent. Speaking at a joint press briefing with Portuguese Prime Minister Jose Sócrates in Berlin on 2 March, the Iron Chancellor insisted that it was not possible to "artificially lower" the interest rates charged to the Irish state on its €85bn EU/IMF bailout deal. Incoming Taoiseach Enda Kenny had “placed heavy emphasis on renegotiating the deal” during Ireland’s recent election campaign”, notes the Dublin daily, adding that at 5.7%, the terms of the deal are “crippling”.
Regarding the Merkel/Sócrates briefing, Público notes that “with one voice” the two leaders “carefully recited” a speech designed to convince markets as to troubled Portugal’s financial health. Rejecting out of hand that Lisbon needed an IMF bailout or help from the European Financial Stability Fund (EFSF), Merkel praised the Portuguese PM for "courageous steps to reduce the deficit”, while stressing that structural reforms and austerity budgets “must go further." According to the Lisbon daily, Merkel expressed reservations over Portugal’s request that the European Financial Stability Fund be strengthened in exchange for submitting to the terms of the Franco-German inspired competitiveness pact, due to the “increasing hostility” of German public opinion to help for weak economies.
With the Eurozone 17 finance ministers preparing to meet in Brussels on 11 March to discuss the terms of Sarkozy-Merkel driven plan to harmonise Europe’s tax, labour and pension policies, non-euro member states are feeling sidelined, notes Adevărul. “Poland is angry because it was not invited to the table,” writes the Bucharest daily, adding that Bulgaria which, has already prepared proposals to amend the Constitution to ensure the stability of public finances, “feels it has done its homework.” Meanwhile, crisis-stricken Romania fears that its future contribution to the EFSF, pencilled in at €2.5 billion, is excessive. Currently calculated according to GDP and population, non-eurozone Romania wants this figure calculated for GDP only, as is the case for Eurozone members. With euro and non-euros members increasingly angry about Merkel’s unilateral handling of the crisis, while Brussels seemingly looks on, President Van Rompuy is currently touring Central and Eastern Europe, to “calm spirits”, the Bucharest daily notes.