GERMANY:CHANCELLOR ANGELA Merkel hailed Europe's fiscal compact, agreed on Monday night in Brussels, as a "masterpiece".
Yesterday in Berlin, the reviews came in and were anything but raves, with opposition parties and unions largely critical of Germany’s austerity-first approach.
Unsurprisingly, officials from Dr Merkel’s Christian Democratic Union (CDU) said the deal was a “tremendous success” – a standard response after every summit.
“Now we have harmony to push on with finance stability and budget consolidation and, on the other hand, to do more for economies,” said Norbert Bärthle, the CDU budget spokesman. “It’s an important step to the future.”
He acknowledged dissatisfaction among CDU backbenchers that the fiscal pact does not contain an automatic sanction mechanism, as demanded by Germany.
While some CDU politicians said the deal did not go far enough, the opposition Left Party said it would “push Europe further into crisis, with the debt handbrake engaged”.
The Greens criticised the government for alienating partners in their pursuit of the fiscal compact.
“Dr Merkel announced the fiscal pact would give the Maastricht Treaty teeth,” said Jürgen Trittin, Green parliamentary leader. “Instead she delivered a wonky false teeth”. Even more outspoken were Germany’s union leaders, warning that the fiscal compact would drive struggling countries in Europe further into disaster.
“This deal is a fraud,” said Michael Sommer, head of Germany’s Trade Union Federation. “This deal doesn’t answer the question of how to improve public revenues.” German think tank analysts postponed final judgment on the deal, to be signed in March.
“It’s a bit early to call this the turning point as many questions remain to be answered,” said Fritz Vannahme, head of the Bertelsmann Foundation’s European programme, citing the unresolved question of Europe’s bailout fund capacity. “The agreements to boost competitiveness and growth are, to be honest, just game-playing between various columns in the EU budget of money that was already allocated.”
Dr Merkel’s determination to build tighter oversight measures into a second Greek bailout was rejected by EU partners yesterday. Austrian Chancellor Werner Faymann said a proposal was inappropriate and an “insult” to the Greeks.
Luxembourg’s prime minister Jean-Claude Juncker, the head of the Eurogroup of euro zone finance ministers, said Greece needed closer oversight. “But I don’t see the need for a special budget commissioner specifically for Greece,” he told German national radio. Foreign minister Guido Westerwelle tried to smooth out disagreements over future plans for Greece.