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Famed ‘Merkozy’ relationship wobbles amid crisis
Question of the Day
BRUSSELS (AP) — They once were so close that people started calling them “Merkozy,” but you can always count on money to break up a beautiful relationship.
German Chancellor Angela Merkel and French President Nicolas Sarkozy still talk on the phone every day and meet plenty for dinner. But nowadays, as yet another summit of European leaders approaches Wednesday, they mostly just discuss the finances that divide them — some hundreds of billions of euros.
With the financial crisis, that center is under ever more pressure, and it shows.
The “Merkozy” relationship had been headed downhill for a while. As the euro crisis has dragged on from one summit to the next, through ups and downs of market volatility, the neighboring leaders have loosened their embrace.
Mrs. Merkel and Mr. Sarkozy stood side by side at Sunday’s European Union summit to face the international media, presenting a united front as they struggled to find a common solution to the financial turmoil that has become the EU’s most divisive issue.
Their common message, though, was that they failed to make any tangible progress and pushed all decisions off until another hastily called summit on Wednesday.
That’s pretty risky, because since the summer, markets have been pouncing on every delay in decision-making or show of hesitancy in the euro crisis.
“The determination of the chancellor and myself is absolutely total,” Mr. Sarkozy said.
But there is no denying their two nations have different agendas in the crisis.
Mrs. Merkel takes the frugal, hard-nosed line, trying to protect taxpayers as much as possible from having to bail out profligate nations such as Greece. She also cherishes the independence of the European Central Bank and wants to keep it out of the EU rescue fund. As the biggest EU funder, Germany has the most clout.
France has the EU’s second-biggest economy, but Mr. Sarkozy has to worry about French banks that are heavily involved in several EU nations teetering on the edge of bankruptcy. He desperately is trying to protect those financial institutions from losing too much money in the crisis since that could affect his chances of re-election in May.
But France’s woes easily could become a German problem, too. If France is forced to help out its banks, its own AAA-rating could come under threat, driving up Paris’ borrowing costs and potentially destabilizing the entire eurozone rescue architecture. So in the end, no matter how much they disagree, their fates are intertwined.
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