Story tools

Print this article

Email to a friend

Your feedback

Todayâ??s headlines in the newspapers have been about the apparent differences between David Cameron and Angela Merkelâ??s vision of a reformed Europe. We say they are saying pretty much the same thing.

Editorials and headlines have been full of how Merkel and Cameron are heading towards this massive bust up in Berlin later on in the week when they meet to discuss the vision of a new Europe.

Most commentators believe that the uber European and little Englander would clash on everything and if Britain persists then Germany would create 17 member new treaty beyond the European Union structures.   But is this really the case?  Not if the speeches and actions of the leaders are anything to go by.

Despite the rhetoric coming from some parts of Berlin, the German Chancellor has gone on record saying that she wants the 27 member European Union albeit with different levels of membership.   Germany wants the single market and has no intention of following Sarkozy in his dream of creating a protectionist core eurozone which does not believe in the EU 27 single market.

Germany benefits from the single market and wants the power of the single market comprising of Britain and other countries to push for negotiations in the global stage.  But it also realises that to make the Euro work there needs to be more cohesion in fiscal and monetary policy within the eurozone.

Those countries not part of the euro should still be part of the EU 27 single market and the German Chancellor is open to a new vision of Europe where there is a core Europe and more loosely bound other member states that are still part of the overarching European Union, single market and so forth.

“The task of our generation now is to complete the economic and currency union in Europe and, step by step, create a political union,” Merkel said in an hour-long speech to the CDU party faithful in her leader’s speech.

“It’s time for a breakthrough to a new Europe,” she added but by Europe she means eurozone.

The focus for Mrs. Merkel is to save the euro and thus protect the German and the eurozone economy as well as the wider economy.  Growth is needed and to do that investors need to have confidence and therefore there needs to be stronger rules governing economic policies within the eurozone.  David Cameron has no problems with that.

In his speech he reiterated the need for the eurozone to move closer into a fiscal and monetary union but also pointed out that the 10 non euro states should not be mere spectators but part of an “outward looking” and “flexible network” focused on delivering jobs and growth for the citizens.

"We should look sceptically at grand plans and utopian visions; we've a right to ask what the European Union should and shouldn't do," he said.  And there is little to suggest that Mrs. Merkel or the CDU or even the German public would have a major problem with that argument.  Because interestingly, following Mrs. Merkel’s speech, the CDU members voted to allow Eurozone countries to opt out of the single currency but be part of the European Union.

The only real difference between Cameron and Merkel lies in the use of the European Central Bank (ECB) as the lender of the last resort.  So far, Germany and especially the politicians and the Bundesbank have been against it.  But even that position is probably softening because it is becoming increasingly clear that unless someone guarantees the eurozone sovereign bonds, this crisis would not be over and could easily spread from Italy to France.

Even the German Chancellor’s own economic adviser Peter Bofinger has gone on record proposing active intervention by the European Central Bank.  He said if all else fails then “in the end only the ECB is left ”and recommended“comprehensive” intervention by the ECB.

So there is little chance of a major bust up – in fact there are more chances of a pragmatic vision of the new Europe emerging from this bi-lateral summit in Berlin on Friday.