A few days after Germany proposed the stripping of Greek fiscal authority from the insolvent country, in exchange for providing funding for what German FinMin Schauble called today a "bottomless pit" (and Brüderle chimed in saying that "a default of the Greek government would be bitter but manageable), Sarkozy decided to demonstrate his "muscle" if not so much stature, and openly denied Germany [21], saying "There can be no question of putting any country under tutelage." Sure enough, it was now Germany's turn to reciprocate the favor. According to Bloomberg, "Finance ministers from the four euro- area countries with AAA ratings -- Germany, Finland, Luxembourg and the Netherlands -- will meet in Berlin tomorrow afternoon, a German Finance Ministry spokesman said." And as is well known, FrAAnce no longer a member of this, however meaningless, club. "The gathering is part of a a series of meetings convened by officials from the highest-rated euro states, the spokesman said, speaking on the customary condition of anonymity. Ministers will discuss current issues without briefing reporters after the meeting." And so the gauntlet of public humiliation is now once again back in Sarkozy's court. The good news: if the de minimis Frenchman does not get his act in order, and overturn the massive lead that his challenger in the April presidential elections has garnered, he will need to endure the humiliation for at most 3 more months. In other news, it appears that when it comes to saving political face, the rating agencies are actually quite useful.
And due to popular demand, here is a summary of European summits and their "achievements" in the past year, courtesy of Reuters.
Feb. 4, 2011 - Summit of EU heads of state and government.
- Germany and France tried to win backing for a pact to strengthen the euro zone economy, but many other EU states were angered by what they saw as a fait accompli and the measures contained in it.
March 4 - Fourteen EU leaders, hosted by Finland, met to prepare a comprehensive response to the euro zone debt crisis.
- Finland said the common will was there for European leaders to agree a pact that would call on member states to enact national legislation on debt.
March 12
- Euro zone leaders agreed the capacity of the region's bailout fund, the European Financial Stability Facility, should be raised to 440 billion euros ($600 billion) from 250 billion, but left it up to finance ministers to work out how.
March 15 - Meeting of EU finance ministers in Brussels.
- Euro zone officials said they were likely to agree details on how to bolster the EFSF soon and that the reformed facility should be operational by the summer.
March 24, 25 - Full summit of EU leaders in Brussels.
- They confirmed that the EFSF would have a higher effective lending capacity by June.
April 8, 9 - Informal meeting of European finance ministers in Hungary.
- EU finance ministers urged Portugal to commit to reforms. Portugal on April 6 became the third euro zone country after Greece and Ireland to ask for EU and IMF aid.
May 16 - Euro zone finance ministers meet in Brussels.
- Ministers approved a 78 billion euro bailout for Portugal but insisted that Lisbon ask private bondholders to maintain their exposure to its debt.
May 17 - European Union finance ministers meet in Brussels.
- Europe's top financial officials acknowledged for the first time that Greece may have to restructure its debts.
June 23, 24 - Summit of EU leaders in Brussels.
- Euro zone leaders endorsed the treaty setting up the European Stability Mechanism (ESM) - a permanent mechanism for resolving sovereign debt crises - from mid-2013.
July 3 - Extraordinary meeting of euro zone finance ministers in Brussels.
- Ministers approved the next 12 billion euro instalment of Greece's bailout, but signalled that the nation must expect significant losses of sovereignty and jobs.
July 21 - Meeting of euro zone heads of state and government in Brussels.
- Euro zone leaders agreed on giving the rescue fund broader powers to prevent contagion from the debt crisis.
Sept. 6 - Finance ministers of the Netherlands, Finland and Germany meet in Berlin.
- The Dutch finance minister said talks with Finland and Germany had not resolved a row over a bilateral deal between Finland and Greece, granting the Nordic country collateral for contributing to a new Greek bailout package.
Sept. 16, 17 - Informal meeting of ministers and central bank governors in Wroclaw, Poland.
- EU finance ministers broke no new ground in dealing with the euro zone debt crisis. U.S. Treasury Secretary Timothy Geithner made an appearance and urged Germany to provide more fiscal stimulus for the euro zone.
Oct. 3 - Meeting of euro zone finance ministers, central bankers and EU commissioners in Luxembourg.
- European finance ministers agreed to safeguard their banks as doubts grew about whether a planned second bailout package for Greece would go ahead.
- Hours earlier, French-Belgian municipal lender Dexia became the first European bank to have to be bailed out due to the euro zone's sovereign debt crisis.
Oct. 23 - Meeting of EU leaders.
- Leaders near agreement on bank recapitalisation -- how to leverage their rescue fund to try to stop bond market contagion.
Oct. 26-27 - Euro zone leaders strike a deal with private banks and insurers for them to accept a 50 percent loss on their Greek government bonds as part of a plan to lower Greece's debt burden. The agreement is reached after more than eight hours of hard-nosed negotiations.
- Leaders also agree to scale up the EFSF to about 1 trillion euros and to recapitalise European banks to an estimated 106 billion euros ($147 billion).
Nov. 29 - Euro zone ministers meeting in Brussels.
- Ministers agree on detailed plans to leverage the EFSF but do not say by how much because of rapidly worsening market conditions, prompting them to look to the IMF.
Dec. 5 - Sarkozy and Merkel meet in France.
- They float proposal for a euro zone "fiscal compact" to enforce budget discipline across the 17-nation bloc. They say they want any necessary treaty changes for their plans to be enacted to be agreed in March and ratified after France wraps up presidential and legislative elections in June.
Dec. 8 - The ECB announced unprecedented action to support Europe's cash-starved banks with three-year liquidity tenders and easier collateral rules and cut interest rates back to a record low 1.0 percent.
- However ECB President Mario Draghi discouraged expectations that the bank would massively step up buying of government bonds if European Union leaders agree on moves towards closer fiscal union at a crucial Brussels summit.
Dec. 8/9 - Crisis summit of EU heads of state and government in Brussels. Sarkozy and Merkel laid out their plan to impose mandatory penalties on euro states that exceed deficit targets, to restore market trust and arrest the region's debt crisis.
- Twenty-three of the 27 leaders agreed to pursue tighter integration with stricter budget rules for the single currency area, but Britain said it could not accept proposed amendments to the EU treaty after failing to secure concessions for itself.
Jan. 30, 2012 - Summit of EU heads of state and government in Brussels. Twenty-five out of 27 EU states agreed to a German-inspired pact for stricter budget discipline - only Britain and the Czech Republic refused the fiscal compact, to be signed in March.
Feb. 6 - Euro zone finance ministers will meet in Brussels to try to agree a second financing package for Greece.