28 November 2011

FT: Germany told to act to save Europe

The extraordinary appeal by Radoslaw Sikorski, delivered in the shadow of the Brandenburg Gate in the German capital, came as the Organisation for Economic Cooperation and Development called on European leaders to provide “credible and large enough firepower” to halt the sell-off in the eurozone sovereign debt market, or risk a severe recession.

Wolfgang Schäuble, German finance minister, rejected calls for the European Central Bank to act as a “lender of last resort” in the eurozone, and for the introduction of jointly guaranteed eurozone bonds to relieve the pressure on the most debt-strapped members of the common currency, such as Greece and Italy. Germany was not big enough to support the rest of the eurozone on its own, Mr Schäuble said. The way to win back the confidence of the markets was to complete monetary union with a “stability union” based on strict budget discipline enshrined in the treaties of the EU.

In a startling comment for a senior Polish minister, Mr Sikorski declared that the biggest threat to his nation’s security was not terrorism, or German tanks, or even Russian missiles, but “the collapse of the eurozone”.

“I demand of Germany that, for your own sake and for ours, you help it survive and prosper”, he said. “You know full well that nobody else can do it. I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity. You have become Europe’s indispensable nation." Yet he backed Germany’s drive for deeper integration in the EU and the eurozone. The Member States faced a stark choice between “deeper integration or collapse”, he warned, challenging the UK government to support reform, or “risk a partial dismantling” of the union. “We would prefer you in, but if you cannot join, please allow us to forge ahead”, he said.

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