May 22, 2010
Europe’s governments struggled to mask sharp differences yesterday even as they backed new sanctions for indebted countries in the battle to prevent a debt crisis from spiralling into an emergency that threatens the very survival of the euro.
Germany’s two houses of parliament rubber-stamped the country’s contribution to the €750bn (£652bn) package of loans and guarantees, the so-called “shock and awe” package hammered out by European leaders this month to prevent a Greek-style debt crisis from afflicting any other nation in the euro area with threatened bankruptcy.
Germany’s backing, despite a mood of public anger over the cost of bailing out Greece, was a clear signal to the markets that the biggest eurozone economy is strongly committed both to ending the debt crisis and to propping up the single currency in the longer term.
But EU finance ministers meeting in Brussels to discuss an overhaul of the rules underpinning the euro were under renewed pressure after a spat between the leaders of France and Germany this week triggered fresh market jitters.
Since the bailout package was agreed, it has become clear that governments also need to back it with a major review of the rules that govern the euro. But anything that would require an amendment to the EU Treaty risks provoking a political crisis, not least in Britain.
This article was posted: Saturday, May 22, 2010 at 6:19 am