Angela Merkel wanted to postpone a new European Central Bank banking supervisor because that in turn delays decision on using the euro’s bail-out fund to recapitalise banks until after German elections.
To see the tricksy, evasive, responsibility-doging fudge – a tortuous linguistic exercise that went into the early hours of today – it is necessary to contrast before and after.
Before:Here is the original draft that the leaders began discussing yesterday: “We need to move towards an integrated financial framework, open to the extent possible to all Member States wishing to participate. In this context, the European Council invites the legislators to proceed with work on the legislative proposals on the Single Supervisory Mechanism (SSM) as a matter of priority, with the objective of completing it by the end of the year:”
After: Here is the agreed summit text: "We need to move towards an integrated financial framework… In this context, the European Council invites the legislators to proceed with work on the legislative proposals on the Single Supervisory Mechanism (SSM) as a matter of priority, with the objective of agreeing on the legislative framework by 1 January 2013. Work on the operational implementation will take place in the course of 2013.”
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This is no triumph. The EU has gone from a deadline to “complete” from one to “agree” with the schedule slipping from December 2012 to anytime next year. This will mean that Chancellor has deferred the issue of using the ESM to directly recapitalise banks until after elections in September 2013, significantly reversing a June summit decision.
Yes, she has dodged a difficult Bundestag vote. Yes, the EU has rowed back on a decision that when taken four months ago was hailed as a vital postive step, to break the link between banks and sovereigns.
EU leaders had a breathing space – bought by Mario Draghi – to get things done, they ducked the responsibility because the market pressure was off. It is in Marie Antoinette “let them cake” territory: as Spain’s agonies threaten to tear the country apart and 1000 Greeks are losing their jobs every day, EU leaders spent a long night deliberating to change the word “completing” to agreeing” in order to dodge their responsibilities.