German Influence Looms Over Eurozone Deal

All 17 nations that use the Euro have agreed to integrate their fiscal policies and give the European Union more control over their national budgets. Germany was the prime mover behind this push for greater fiscal discipline. Some are saying the agreement, in effect, unites Europe under German control. Host Audie Cornish speaks with NPR's Sylvia Poggioli in Rome.

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AUDIE CORNISH, HOST:

This is WEEKEND EDITION from NPR News. I'm Audie Cornish. The European Union has set itself on a new path. At a summit in Brussels, all 17 nations that use the euro agreed to integrate their fiscal policies and give the European Union more control over their national budgets. This new agreement is designed to do a couple of things: keep countries from sinking into debt, save the euro as the common currency, and save European economies from collapse. Germany was the prime mover behind this push for greater fiscal discipline. NPR's Sylvia Poggioli joins us from Rome to give the view from the debt-troubled countries of Southern Europe - Italy, Spain and Greece. Hello there, Sylvia.

SYLVIA POGGIOLI, BYLINE: Hi, Audie.

CORNISH: So, to begin, how are southern European countries reacting to this new agreement?

POGGIOLI: Well, the overall reaction is one of inevitability. All three countries are at the heart of the eurozone crisis and at the mercy of both the markets and the stronger economies in the eurozone. Their major complaint is that the EU agreement does not contain any steps to promote growth. Rather it forces these countries to accept further austerity measures. You know, many economists in Europe and elsewhere have for months been saying this is a negative prescription that could lead to a deep recession throughout the region. And it's not at all clear whether this agreement will resolve the current euro crisis. Italian Prime Minister Mario Monti, who went to Brussels in the hopes of the agreement would put the accent on growth was disappointed. When he was asked whether the summit had saved the euro, he replied forlornly, I don't know, I don't know if you know, or if anyone will know for a few days.

CORNISH: And notably, the British prime minister, David Cameron, voted against this. How are other nations reacting to that and how does it affect this goal of having a European political union?

POGGIOLI: Well, most commentators blame British Prime Minister David Cameron for pushing domestic demands that had nothing to do with the immediate Eurozone crisis. But, again, there was a sense of inevitability. Many commentators say Britain for too long had one foot in and one foot out of the EU and was too often an obstacle to greater integration. Some commentators suggest both the French and German governments are actually pleased Britain opted out. You know, it's an open secret that Paris and Berlin strongly disapprove of the so-called Anglo-Saxon financial services industry, which they claim is at the origin of the euro crisis.

CORNISH: How long will it take to actually put this agreement into action?

POGGIOLI: Well, leaders said the agreement will be ready in March. That seems pretty optimistic because some governments will want to renegotiate further changes. Italy's Mario Monti said he'll continue to push for the creation of euro bonds, which Germany strongly opposes. And then there will be parliamentary ratifications, as well as amendments to constitutions and perhaps even a referendum. Added to this, the EU agreement was taken over the heads of citizens, out of leaders' fears of the crisis, not by popular demand. There are ongoing strikes and anger's growing, and this is going to make it harder for governments to sell the EU agreement to their citizens. More and more southern Europeans are rejecting what they see as the creeping Germanization of the European Union.

CORNISH: Right. It's interesting that for the first time in the history of the EU, Germany essentially is in charge. And can Germany impose its terms on the rest of the continent?

POGGIOLI: Well, in the last few months and through this last summit, it did. But there are many skeptics about the future. First of all, Germany's obsession with inflation seems to ignore the fact that draconian austerity measures have dried up consumption in the southern periphery, a key German export market. Then there's what has been called the politics of memory. Already in Greece, there's a strong anti-German sentiment with revived memories of the Nazi occupation. And elsewhere in the media you see more and more references to the German past, such as goose-stepping methods and so on. Even former German Foreign Minister Joschka Fischer told an Italian daily the idea of a Germanized continent is unhealthy. But the key question is whether Germany will be able to embrace broader Europe-wide interests. The former head of the EU commission Romano Prodi says that for now German Chancellor Angela Merkel has won. But if Germany focuses only on its own narrow national interests, he said, this will turn into a defeat.

CORNISH: NPR's Sylvia Poggioli in Rome. Sylvia, thank you so much.

POGGIOLI: Thank you, Audie.

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