Euro crisis: “For good or ill, she is perceived to set policy, pace and tone at every turn.”

In the Irish Times Arthur Beesley’s assessment of the “mammoth task” European leaders face in the year ahead is well worth a read.  From the Irish Times article

Strain and anxiety were everywhere in 2010. Merkel held the line against easy bailouts but her dogged intransigence on core principles led to accusations that she was making matters worse, not least in Ireland. From the summit room came whispered reports of shouting matches between French president Nicolas Sarkozy and ECB chief Jean-Claude Trichet; of threats from Merkel (later denied) that she might pull Germany from the euro; and of ardent Spanish displeasure at moves to burn bondholders. Some emergency meetings continued until the middle of the night; routine meetings ran to the early hours.

There were glaring moments of scarcely concealed tension. Finance ministers emerged tired-eyed from a long meeting in Luxembourg to look in astonishment at television shots of Merkel and Sarkozy declaring in Deauville that they had decided how Europe would respond to the crisis. Thus did European Council president Herman Van Rompuy, chairman of the Luxembourg meeting, find himself squeezed out by Berlin and Paris.

There was farce too. Van Rompuy claimed many months ago that the battle to save the currency was won, remarks that smacked of wishful thinking. Trichet, whose pallor is seen to denote his acute concern about the crisis, is fond of saying, “We never declare victory.” There is good reason for that.

Four things are clear at this point. First, raw politics are at the core of the crisis. This goes between governments, within them and in relations with the people touched by their actions.

Do read the whole thing.

And, with history still knocking for Frau Bundeskanzerlin, also in the Irish Times, Derek Scally gives a flavour of the German domestic political scene.

Five years ago Germany was plagued by self-doubt and recession; the economic boom has revived a sense of invincibility. While the rest of the EU sees this as an indication of how Germany benefits from the euro, at home Germans see themselves as victims of the shared currency. The EU and the euro zone are increasingly perceived as an expensive albatross rather than, through the common market, a cornerstone of the country’s economic success.

In Chancellor Merkel’s defence, there is little European understanding that she is facing a run of state elections this year, and a series of losses there would bring the curtain down on her party leadership. An increasingly EU-critical constitutional court, next May, will hear arguments that Berlin broke the law by bailing out Greece and Ireland.

Much of the German leader’s tough rhetoric has been for domestic consumption, framing the crisis as a chance to right the wrong of agreeing to a joint currency without joint economic and fiscal policy.

Its price for playing along with further crisis measures is two-fold: a new rule-based euro zone and austerity measures in debt-ridden countries similar to Germany’s own recent reforms.

Dr Merkel is not Konrad Adenauer, nor is she Helmut Kohl. Her relationship with the EU, like that of Germans today, is a far more sombre affair. Yet she has yet to find a new narrative to communicate this, a new language that rings true with today’s German voters. If she loses them, it’s Europe’s loss.