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Bundestag Debate on Eurozone

Quentin Peel has an excellent report in the FT on a recent Bundestag debate that shows the shifting sands inside the German political elite:

German unwillingness to bolster the size of the 440bn eurozone stabilisation fund, or contemplate the issue of jointly-guaranteed eurozone bonds, was in danger of turning the European Central Bank into a “bad bank”, said Frank-Walter Steinmeier, parliamentary leader of the Social Democratic party, and former vice-chancellor.

Jürgen Trittin, co-leader of the Green party in the German Bundestag, said the chancellor was regarded throughout the eurozone as a “Teutonic savings-monster” whose actions had aggravated the crisis. He accused her of “disorientation”, and being driven by fear of the popular press. […]

[Steinmeier] spelt out his three-point programme, outlined in an opinion article for the Financial Times on Wednesday, calling for a debt-restructuring for Greece, Ireland and Portugal, combined with a debt guarantee for the rest of the eurozone, and increased funds for the EFSF. He also backed the idea of issuing eurozone bonds in the medium term, combined with much closer political and fiscal co-ordination amongst the member states.

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The price of integrating Europe in an unbalanced way that ran so far ahead of public consciousness has been criminally high. But I do think we see here that the basic calculation that forging ahead with a single currency would drive deeper integration is happening. Leaving aside the policy ideas here, what you’re seeing is a European policy debate. It’s not Germany versus some other country. And it’s not a simplistic “Europhiles versus Europhobes” debate either. It’s a real disagreement about the best way for Europe to proceed, like how Democrats and Republicans argue in Ohio about national policy.