One way or another, most of Cowen’s senior counterparts in Europe are on the hind foot politically. Merkel’s room for manoeuvre has been circumscribed ever since she lost her majority in the upper house of parliament; Sarkozy’s popularity has collapsed; Silvio Berlusconi administration in Italy is teetering; and José Zapatero is haunted by fear that his reprieve from the markets may prove temporary. Similar weakness prevails elsewhere, with only the recently elected David Cameron seen to be secure.
All of which makes it especially difficult to agree the most crucial element of the package to reform the euro system: sanctions on countries that consistently break EU budget rules.
Fearful that large fines would only magnify countries’ fiscal weakness, Merkel and a few other leaders want instead to suspend the voting rights of errant countries. But most countries – Ireland among them – don’t want that, not least because it involves a change to the EU treaties.
The talks have been stalled on this point for months, with little sign of compromise. While some well-placed observers see domestic political concerns in the roots of Merkel’s intransigence, the final push for a deal cannot be avoided forever.
And frustration is taking hold. Luxembourg prime minister Jean-Claude Juncker, who chairs meetings of the euro finance ministers, yesterday bemoaned the “nonstop repetition of generalities” in the talks and “the impression on financial markets that we’re not following through” with important reforms.
Yet if a sense of drift is palpable, so too is the perception that things would move quickly if there was another bout of disruption. Testing times for European Council president Herman Van Rompuy, the man charged with bringing everyone together in six weeks’ time. Testing times for everyone.