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German chancellor Angela Merkel indicated yesterday that agreement on such a [bailout programme] deal is so far away that it has yet to even come near her chancellery, let alone cross her desk, for discussion. “There’s no change on my agenda at the moment”, she said.
She is angling towards talks on a new European treaty, something Berlin’s exhausted partners want to put on the long finger. The roles are reversed when it comes to the latest eurozone crisis initiative: a European banking regulator.
Many European countries, led by France and Spain, are anxious to press ahead with a big-bang regulator to oversee 6,000 European banks. That would open the door to a direct recapitalisation of Spain’s banks from the ESM fund. Berlin, however, is on a go-slow. It wants European oversight for just 25 systemic banks. And political disagreement on this point, it believes, precludes discussing practical measures such as hiring employees, finding premises or, crucially, Spain’s hopes of swift bank recapitalisation.