The alleged "German victory" at the Brussels EU summit, where 25 governments signed on to a drastic austerity regime called "fiscal compact," will soon prove to be a Pyrrhic one: Most of the rest of Europe has been rallied against "Frau Kommissar Merkel," and the hug which the German Chancellor got from Britain's Prime Minister David Cameron in Brussels indicates a British interest in this German-made insanity. Cameron, by the way, declined to sign on to that pact.
The summit Monday gave the go-ahead for a new austerity pact, which is not only to implement a "debt brake" (total budget balance) in all 25 countries whose governments signed the pact, but also a rigid supervisory fiscal regime short of imposing a real EU proconsul for a "problem country." The EU Commission is given the right to sound the first alarm over "violators" of budget discipline, so that some, as yet unappointed authority (either the government that has the half-year rotating presidency of the EU, a group of select governments, or another new body) can take that violator to the European Court, which then can rule in favor of fines and sanctions. Any new bailout is made strictly dependent on utmost budgetary discipline of a recipient country (the banks there, that is). Furthermore, the signatories want the ESM to go into effect on July 1. Its leveraging capacity is still to be fixed by the big EU Summit in March, but it certainly is above EU500 billion.
But under the sarcastic headline, "Alles Klar, Frau Kommissar," Germany's weekly Der Spiegel already hints that the fiscal compact package will run into enormous roadblocks — because of the arrogant conduct of Merkel. Ratification of the agreement, which is required, because the pact changes aspects of the existing treaties so that more fiscal sovereignty can be transferred to the EU institutions, will meet strong opposition in several of the signatory countries. In France, for example, Socialist Presidential candidate Francois Hollande has declared that he opposes the "debt brake" of the pact, and if elected President, he will not introduce it in France. Even if Sarkozy were re-elected, he would depend on the Socialists' votes to get the pact ratified. Ireland will have a referendum and not just the parliamentary procedure.
And the unpopularity created by Merkel's obsessive pro-austerity drive throughout the rest of Europe, will make the ratification of this "pact," which is widely seen as a "German dictate," difficult in Italy, Greece, and other countries. The Greek news daily Ta Nea has a cartoon showing Merkel acting as a puppet master, with the banner headline: "Nein! Nein! Nein!"