Don’t count on Germany’s economic surrender

It's official: the future of the eurozone is more important than Nick Clegg. Along with other markets, the FTSE has soared on the back of the deal agreed by European officials early this morning, and for good reason. If we are to take this package at face value, the rules of European Monetary Union have been fundamentally re-written. For governments, being in the eurozone means something very different today than it did just a few weeks ago. As we have seen, the role and responsibilities of the European Central Bank (ECB) have changed radically as well.

Germany, and its place in Europe, will be an important theme in the much-trailed Europe speech that U.K.

The rise in German economic power, and accelerated decoupling between Europe’s biggest economy and other euro members, is exactly the opposite of what the euro’s supporters wanted, writes David Marsh.

Marco Annunziata, 25 November 2011Germany’s central bank had to buy its government’s bond this week after a failed bond auction. This shows that i) the economic devastation from a meltdown would engulf every EZ member, and ii) avoiding a meltdown will require central bank action. This column argues that German politicians and the ECB are engaging in brinkmanship to force reforms.

David Cameron’s move to give himself some space by declaring a referendum on the U.K.’s membership in the European Union has backfired, writes David Marsh.

(Alan Rappa)

The eurozone was supposed to equalize trade and interest rates. The Maastricht Treaty supposedly ensures the free movement of goods, capital, people and services. Tensions were supposed to drop. Instead, the eurozone has been a complete failure. Eurozone Complete Failure