It is a measure of the speed at which the politics of the euro crisis is changing. Only a fortnight ago all the attention was being lavished on France's new president, François Hollande, being sworn in in Paris as Monsieur Growth and rushing off on his first assignment to challenge Europe's Frau Austerity, Chancellor Angela Merkel.
"We need new solutions. Everything's on the table," Hollande pledged, meaning he would force Merkel to remove the noseclip and consider things that give off a foul odour in Berlin, foremost among them eurobonds – Germany solving the crisis at a stroke by agreeing to underwrite the debt of Spain, Greece, Italy and all the rest. Fat chance.
By Saturday the growth versus austerity contest had receded as Merkel turned the tables on Hollande.
It was her turn to declare there should be no taboos in grappling with the hard options facing Europe's leaders as they wait to see what will happen in Greece and Spain, and plot their next moves at what is shaping up to be a momentous summit at the end of the month.
Merkel appeared to be calling not only Hollande's but France's bluff. By announcing there could be no censorship of the eurozone to-do list, she meant tabling radical, federalist steps involving gradual loss of national sovereignty over budgetary, fiscal, social, pensions, and labour market policies with the aim of forging a new European political union over five to 10 years.
The USE – United States of Europe – is back. For the eurozone, at least. Such "political union", surrendering fundamental powers to Brussels, Luxembourg and Strasbourg, has always been several steps too far for the French to consider.
Four priorities in Brussels
“Secret plan for a new Europe” — in its Sunday edition, Die Weltoffers details of a programme currently being hatched by the leaders of European institutions. According to the Berlin daily’s sources, European Council President Herman van Rompuy, European Commission President Commission José Manuel Barroso and Eurogroup President Jean-Claude Juncker are working on a proposal that could be tabled for discussion at the 28 and 29 June European Council meeting. The plan will focus on four major themes —
… structural reform, banking union, fiscal union and a political union. (...) If the 27 members states succeed in reaching agreement, the result will be a completely new Europe.
The issue of “fiscal union” is the one which poses the most problems for the German government, remarks Die Welt. For Berlin, the term denotes a stringent austerity policy, that is to say development of the fiscal compact. In contrast, the fiscal union on the agenda for discussion will likely include shared responsibility for national deficits in the form of eurobonds — a measure that Germany has consistently rejected.