“It is better to have the IMF imposing tough reforms than the EU”
In the Irish Times Jamie Smyth gives an illuminating account of press briefings German-style before going on to provide an informative interpretation of current political thinking in Germany on EU affairs.
1) Berlin thinks a Yes vote in Ireland is the most likely result of an October referendum due to the economic crisis. But it is concerned the Government is not doing enough to prepare for a second vote.
2) There are grave fears Czech president Vaclav Klaus will chair the EU leaders’ summit in June and cause a headache over the clarifications sought by Ireland on the Lisbon Treaty. The option of dealing with the clarifications in July has still not been ruled out by an anxious Berlin.
3) If Irish voters torpedo the Lisbon Treaty in a second referendum in October there will be no further enlargement of the Union. Even Croatia may find the EU door bolted shut. One possible escape route after a No vote is to cram all the key reforms in Lisbon – particularly the double majority voting system – into a Croatian accession treaty. This could then be put to vote in states such as Britain or Ireland – offering a simpler question to voters on enlargement and EU reform.
4) Germany has detailed contingency plans drawn up on how to bail out a eurozone member state but is unwilling to tempt fate by revealing these to nervous markets. German taxpayers should not be asked to bail out countries opposed to further European integration. Any country that requires assistance will have strict conditions and reforms imposed.
5) Any bailout of a eurozone member would probably involve the IMF and not just the Union. It is better to have the IMF imposing tough reforms than the EU, which would then suffer an inevitable public backlash.
6) Germany is deeply concerned about Ukraine, where bitter squabbling between the prime minister and president threaten to wreck IMF-led attempts to stave off economic collapse. If Kiev goes under, eastern Europe could suffer a contagion effect allowing Russia to exploit the situation and spark a conflict in the Crimea region.
7) Franco-German relations – for years the motor behind EU integration – remain fragile but have recovered from last year’s low prompted by disputes over plans for a Mediterranean Union and car emissions policy. Both countries will aim to agree on a candidate to put forward for the position of European Council president – if Lisbon is approved.
