Fascinating piece over at Spiegel Online about what went on at the EU Summit Thursday night and Friday morning. Not so sure this contributes to the long-term political stability of Europe and is sure to generate local political blowback in the North. The Danish PM couldn’t frame it any better,
The threats apparently made an impact on the other delegates. Danish Prime Minister Helle Thorning-Schmidt asked pointedly whether the attendees were now all hostages.
Money quotes from the piece,
Monti’s uprising began at 7:00 p.m. on Thursday evening. That was when European Council President Herman Van Rompuy wanted to conclude the summit’s first working session and announce the growth pact to the press. According to participants, Monti was furious and asked Van Rompuy where he was going. Had the president perhaps not understand correctly, Monti reportedly asked. The Italian prime minister said he could not leave the summit without concrete measures to fight the high interest rates on Italian government bonds. He would not agree to the growth pact until that issue had been clarified. Rajoy lent his support to Monti and said that he too could not yet approve the pact…
After midnight, when the blockade had still not been resolved, representatives of the 10 non-euro EU members headed back to their hotels. Leaders of the 17 euro-zone countries remained in their seats and began a decisive round of negotiations. At this point, members of the German delegation were still insisting they would not give up their hardline position.
A few hours later, however, Monti and Rajoy had the chancellor where they wanted her. She agreed that countries would in the future be able to receive funds from the ESM without having to submit to troika oversight. Instead, only the European Commission’s annual targets will have to be met. Monti said that Italy would not ask the ESM for help. For now, he only wanted to send a signal to the financial markets in order to take the pressure off Italy.
But the decision raises all sorts of questions. What happens to the countries that have already received money from the temporary rescue fund, the EFSF? Officials in Brussels said that the new decision did not change anything about the programs for Greece, Portugal and Ireland. All the agreed goals will continue to apply and be monitored by the troika. But those countries might also start clamoring for the terms of their deals to be relaxed. The summit’s decision gives the Greek government in particular more ammunition for renegotiating the terms of its bailout, a step that new Greek Prime Minister Antonis Samaras has already said he wants to take.
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