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Euro Mini-Summit Takes New Focus
Originally published on Sat June 23, 2012 11:07 am
SCOTT SIMON, HOST:
This is WEEKEND EDITION from NPR News. I'm Scott Simon. With the eurozone crisis well into its third year, the leaders of the four major eurozone countries tried once again in Rome to reach agreement on how to try to salvage the single currency. For the first time, the focus shifted away from austerity to growth and job creation. But as NPR's Sylvia Poggioli reports, agreement was not reached on how to end the sovereign debt crisis.
SYLVIA POGGIOLI, BYLINE: The meeting was brief. German Chancellor Angela Merkel, French President Francois Hollande, Spanish Prime Minister Mariano Rajoy and the Italian host, Mario Monti met at the Renaissance Villa Madama for just an hour and 40 minutes. From their expressions and body language at the final press conference, the atmosphere was tense. Monti presented his guests with a roadmap for deeper political and economic integration in order to stabilize the eurozone.
It calls for pooling member states' debt and to use EU rescue funds to buy up bonds of ailing partners. But Merkel said no. The four leaders did agree on a $160 billion package to revive economic growth in Europe, which largely redirects existing EU funds and is worth about 1 percent of the region's GDP. At the final press conference, Monti made a not very veiled jab at the German focus on austerity.
PRIME MINISTER MARIO MONTI: (Through Translator) Growth can only have solid roots if there's fiscal discipline. But fiscal discipline can be maintained over the long term only if there is substantial growth and job creation.
POGGIOLI: But the German chancellor did not budge. Asked by a reporter why EU bailout funds cannot be channeled directly to ailing Spanish banks, Merkel stressed the need for firm guarantees.
CHANCELLOR ANGELA MERKEL: (Through Translator) Responsibility and control must go together. I, along with the German, French and Italian taxpayer must have guarantees from the Spanish state, not its banks. I can't tell banks how to behave.
POGGIOLI: There was one other agreement, the creation of a financial transactions tax that could be used for further bank bailout. But differences prevailed. France's Hollande was firm in his rejection of German intransigence regarding the creation of a common bond for the eurozone.
PRESIDENT FRANCOIS HOLLANDE: (Through Translator) I consider euro bonds to be an option, but not in 10 years. They will be a useful tool for European integration and I will fight for them.
POGGIOLI: While Merkel has insisted on greater EU control over national budgets before opening up German purse strings, Hollande urged a greater sense of partnership.
HOLLANDE: (Through Translator) There can be no transfer of sovereignty without an improvement in solidarity.
POGGIOLI: The Rome meeting was a lead-up to next week's crucial EU summit. The Italian host has warned that there's no room for failure and we have a week to save the eurozone. Monti has stressed a new danger on the horizon. After more than 20 inconclusive summits in three years and with most of the eurozone in recession, there is growing opposition among citizens and in parliaments toward greater European integration.
In several countries, there's a mounting backlash against the single currency itself. According to polls in Germany, 55 percent of those interviewed wished they still had the old deutschmark. And in Italy, Monti faces a rebellion led by his predecessor, Silvio Berlusconi, who's riding a growing wave of anti-euro sentiment. The surprise success of the populist Five Star movement in local elections last month changed Italy's political mood.
It's leader, Beppe Grillo, wrote in his blog: The EU is out of control and the euro is a box of dynamite with a fuse getting ever shorter, and we're sitting on top of it. Populist and anti-EU sentiment is spreading across Europe, or, as one Italian commentator put it, the European house is burning. Chancellor Merkel has plans for its renovation but she's not trying to put out the fire. Sylvia Poggioli, NPR News, Rome. Transcript provided by NPR, Copyright NPR.