Apparently seeking to avoid a long and uncertain process of treaty changes, German Chancellor Merkel proposed, during the euro area summit on December 19, 2013, that member countries sign a “binding contract” with the E.U. Commission with respect to fiscal policy and structural changes they were required to implement.
Spain’s prime minister would have none of it. For him, a “binding contract” was out of the question. Interestingly, Spain was supported by countries which usually vote with Germany, such as Austria, Finland and the Netherlands.
According to a well-informed source, the German chancellor responded by saying: “Without the necessary cohesion, the monetary union will explode… but if this text is not acceptable to Spain, let’s drop the whole idea…come to the edge of the precipice to act, let’s go home and wait… you will see what will happen, and who will pick up the pieces…” and if we have to
Looking at all this, Chancellor Merkel’s pathos sounds more foreboding than anything I have seen in a long time. But make no mistake: the German leader is a convinced European – a person whose unrelenting efforts to strengthen the euro area investors can take to the bank.
She now has two powerful and likeminded partners to work with: the French president and the ECB president. She is the leading player of a formidable trio fully aware of what has to be done to keep the euro as an instrument of peace and prosperity on a continent where the worsening unrest in Ukraine serves as a reminder of Europe’s unfinished business.