Friday

18th Aug 2017

Italy sides with Germany against eurobonds

  • Italy was invited to a Merkel-Sarkozy mini-summit for the first time (Photo: Présidence de la République - C.Alix)

At Italy's first invitation for an audience before the Franco-German duo that powers European decision-making, Prime Minister Mario Monti made it clear that he backs the German position on eurobonds.

Meanwhile, little advanced at the meeting of the EU triumvirate, with Germany refusing to discuss whether the European Central Bank (ECB) should intervene more robustly to defend the eurozone.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"The commission made a lot of proposals yesterday about budget discipline and we largely agree on that," Monti told reporters in Strasbourg after meeting with French leader Nicolas Sarkozy and German Chancellor Angela Merkel, explaining that such a move chips away at policy competition between states.

"I just think that eurobonds, or stability bonds, whatever you want to call them, produce a leveling of the different competitive situations which are expressed via interest rates, which gives the wrong signal, as different interest rates are an indication of where work still needs to be done."

Merkel and Sarkozy have frequently met since the crisis separately from other EU members only to emerge hours later to present their vision for steps that should be taken.

It was the first time an Italian leader had been welcomed into the Franco-German tent, although little emerged on Thursday apart from an announcement from Sarkozy that Paris and Berlin will propose their own modifications to the EU treaties.

"We are working on proposals [for changes] which have advanced a great deal," he said. The proposals are to be presented to the rest of the bloc at its winter summit on 9 December.

Hopes on France's part that the meeting would resolve the core dispute between Paris and Berlin, the role of the European Central Bank in the crisis, were unfulfilled.

The three instead put out a boilerplate statement of their continued support for the bank's independence.

"We all stated our confidence in the European Central Bank and its leaders and stated that in respect of the independence of this essential institution we must refrain from making positive or negative demands of it," the French president said.

"Germany has a history, a tradition and a culture. France has another. We're trying to understand and converge toward the same point ... Ms Merkel explains her worries to me, sometimes at length, and I tell her mine, and then, given the weight of history between our countries, we converge. I try to understand Germany's red lines and France's red lines."

Sarkozy was reportedly "irritated" at Merkel's unwillingness to do discuss the issue, according to Le Monde, the French daily, despite making nice in public.

France had expected the core issue to be placed firmly on the table. The same day, French foreign minister Alain Juppe had said the ECB must become the lender of last resort.

"It's urgent. It will be discussed this very day in Strasbourg," he said on France Inter radio.

For his part, eurosceptic Czech President Vaclav Klaus in a new book on EU integration which he aims to publish in all the main EU languages, has lampooned the Merkel-Sarkozy duo.

"Hardly a week goes by without a Sarkozy-Merkel meeting, in which - for us, but without us - with solemn faces and professionally-trained smiles, they make decisions on the future of our continent," his book said.

ECB will not become bank of last resort, Draghi says

In his first appearance as head of the ECB, Mario Draghi has said the Frankfurt-based bank will not become the lender of last resort for the eurozone. The bank lowered its interest rate by 25 basis points to 1.25 percent.

ECB returns to markets to help Italy and Spain

The European Central Bank has decided buy bonds from troubled eurozone countries after a five-month pause in a bid to stem the crisis from spilling to Italy and Spain.

Merkel outlines steps to 'stability union'

German Chancellor Angela Merkel has called for a "stability union" in which all member states behave in a fiscally responsible manner and miscreants can be brought before the EU’s highest court.

Sarkozy pushes for 'two-speed' Europe

With France's borrowing costs on the up and with its prized triple-A rating under threat, French leader Nicolas Sarkozy is publicly advocating a fast-lane Europe for 'core' euro-countries.

Rehn backs 'smart' mutual debt fund

The idea of mutualising eurozone debt remains as controversial as ever but economic affairs commissioner Olli Rehn has spoken out in favour of a halfway house solution.

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

News in Brief

  1. Mixed Irish reactions to post-Brexit border proposal
  2. European Union returns to 2 percent growth
  3. Russian power most feared in Europe
  4. Ireland continues to refuse €13 billion in back taxes from Apple
  5. UK unemployment lowest since 1975
  6. Europe facing 'explosive cocktail' in its backyard, report warns
  7. Danish police to investigate misuse of EU fishing rules
  8. German constitutional court questions ECB's €2tn spending

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  2. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  3. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  4. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  5. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  6. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  7. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  8. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  9. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  10. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  11. ACCAAnnounces Belt & Road Research at Shanghai Conference
  12. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides