Berlin defends euro reforms, denies Merkel 'capitulated'

20th October 2010, Comments 0 comments

Berlin on Wednesday defended a controversial Franco-German agreement on the European Union's budget rules, as media and political allies accused her of bowing to French demands.

Paris and Berlin unveiled proposals to reform the EU's Stability and Growth Pact earlier this week, including harsher penalties for members who break the bloc's rules on deficits and debts.

But Chancellor Angela Merkel gave way on her wish that these penalties -- including the suspension of EU voting rights -- should be automatic, prompting a chorus of criticism that the reforms have not gone far enough.

The Franco-German position is "basically the status quo," argued Klaus Zimmermann, head of Germany's DIW economic institute.

Without automatic sanctions, "what do we have at our disposal to prevent another crisis like the Greek crisis?" said Silvana Koch-Mehrin, a member of the European Parliament from Merkel's coalition partners, the pro-business Free Democrats.

Merkel "completely let (French President Nicolas) Sarkozy take advantage of her and totally failed," added Koch-Mehrin.

Merkel's spokesman, Steffen Seibert, told a regular government news conference that Paris had actually moved in Berlin's direction for the compromise agreement.

"The French came closer to the German position ... for the first time, the French agreed with the Germans to modify the Lisbon Treaty by 2013," he said, referring to the EU's last reform accord.

"In Europe, you only get good results if France and Germany are on the same line," he added, acknowledging that the two governments had "a major job to convince" some of their European partners.

The German press was scarcely kinder to Merkel, however, with the Financial Times Deutschland saying it was a "compromise where one of the partners, in this case Germany, promises something concrete for next week and the other promises something vague for the future."

© 2010 AFP

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