Sarkozy-Merkel-Monti summit: Stability+Solidarity Political Synthesis for €urozone deep Integration

*Strasbourg/Tripartite Summit France-Germany-Italy/Angelo Marcopolo/- The exceptional Tripartite Summit of the 3 Biggest €urozone Countries, revealed, today in Strasbourg, a Strong Will to resolutely advance towards the creation of a both Economic and Political core in EU's Eurozone, with important Changes, able to boost Financial Discipline and Solidarity, by much more Integration and Convergence, Sooner than expected, but without enslaving the move to ephemeral, sometimes superficial and/or speculative Markets' upside-downs, on the contrary decided to definitively rectify Errors committed in the Past by some of their predecessors so that Europe never again faces such crucial challenges, since the leaders appeared conscious of the fact that they are called to build something New and sustainable "for the Long-term", and of "Historic" importance, for which they took a Rendez-vous with the Public Opinion in the following days/weeks, apparently well-decided to give together "a New Dynamics in EU's Integration", (according to Monti's landmark reply to an "EuroFora" founder's question earlier at EU Parliament, at another occasion : Comp. : http://www.eurofora.net/newsflashes/news/merkelsarkozymontitripartitesummitinstrasbourg.html )    
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- "We are, all three of us, the 3 Biggest Economies of €uroZone, determined to work in the same direction in order to support €uro". A main "reason for this (Tripartite) Summit is to mark the Determination of the 3 Biggest €uroZone Economies, to do anything in order to support and guarantee €uro's sustainability", declared from the outset French President Nicolas Sarkozy.  

- Speaking to German chancellor Merkel, he stressed that, "in this complicated period, the Strength of our Alliance is an essential element for the Stability of Europe and of the €uro".

- "We are all three fully Aware of the Seriousness of the situation., and we consider the Same Remedies", Sarkozy revealed, but without going now into concrete details. -------------

"Traditionally, Italy was one of the European Integration's Motors, and it intends to be even more in this Stage, which is anounced as very problematic for all, and particularly for €urozone, but which is also a situation Full of Promisses", Mario Monti surprised his audience.

- "As you know, during its (Millenary) History, Europe has often reacted in a Positive way to Crisis", the new Italian Prime Minister reminded with ambitious optimism.

- "We had a very Intense dialogue between us three, we discussed Possible Solutions for the crisis in €urozone, we shared our concern and we expressed, all three, with a great Convergence of views, the importance that our 3 Countries attach to the Priority Aim of a Good Health for €urozone", Monti observed, (See also infra).
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-- This "is an important discussion between the 3 Biggest Economies in €uroarea, here in Strasbourg", stressed from he outset German Chancellor Angie Merkel.

- "SInce it's a serious situation" (for everybody involved), "we must clearly confirm, all  of us three Biggest Economies of the area, that we Want to keep a stable and Strong €uro : Inside the International Community of Currencies, €uro must be respected", Merkel anounced firmly.

-  "It's not simple, because we've lost so much Trust. Confidence is something that we have to find anew and restore, both for our Countries and among us, by emmitting a Signal of Closer Cooperation inside €urozone in the Future", according to the German Chancellor.

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+"POLITICAL" dimension in Future ?!
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+ At any case, "it is Fundamental that €uro stands firm, (because) It's a fundamental element for the Economic and Political integration of Europe !", went on to add the experienced, twice EU Commisioner Monti.

                                                                                                                                                                                                                                                                        - "€uro is also a Political project, and we are going to defend it with all our forces", agreed Merkel.

=> Thus, "we are also going to make Proposals for a closer Political cooperation, since the Political trust in Europe backtracked, and it's in order to re-build this confidence that we had a very Hamonious discussion, ...as the (French) President Sarkozy also said", she observed, pointing to Sarkozy, (whose personal commitment for a "Political" Europe is well known and expressed in a cystal-clear way, repeatedly, since at least 2007).
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On Concrete Measures examined :
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=> That's why, "during the forthcoming Days, France and Germany will make joint Proposals to Modify the EU Treaties, in order to (A) ameliorate €uroZone's Management, and to (B) have more Integration and Convergence of Economic Policies. We'll naturally inform Mario Monti, hoping that Italy would like to be associated to that", Sarkozy anounced from the outset.

"Indeed, France and Germany work on Proposals to Modify the EU Treaty, because (A) we must advance in the direction of a Fiscal Union, and we are here also in order to say that (B) we must further Coordinate Together our Policies, if we want to have a Single, Common and Stable Currency", the German Chancellor explained.

- "We also discussed today the fact that the Decisions taken (by €urozone) on October 26 must be fully applied : ReCapitalisation of Banks, Negotiations with Greece,  with the Banks, and the (EU) Directive for the Lever effect and for the FSF. So, Ministers of Finance in EuroGroup and EcoFin must take the required Decisions, and during the December (EU) Summit, the Italian Prime Minister will naturally be informed about the advancement of our work", Merkel briefly sumed up for the rest.
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 - "Responsible Governments, .. try to do a Serious Work, to set up Policies, Strategies, and to keep on track, until we find anew the road to Growth, as the (German) Chancellor (Merkel) said, and of the Trust, as the (Italian) President (Monti) said", observed, indeed, Sarkozy.

- "And not to run to look, from one Minute to another, what some say, what others reply, Markets' variations, Market's vibrations", etc..

- Because, "we (responsible and serious Governments) have a Duty to Protect our Citizens, in the long-term, and not only at the end of a Day, or just during half an Hour, which comes and goes : A much more difficult job", he concluded.

The French President was also replying to a Journalist who claimed that a Rating Agency, Fitch, would have threatened France's excellent, AAA current rating : -  "Perhaps, some of our friends didn't get an accurate Translation of what Finch (Rating Agency) said. In that case, I'd be glad to offer a translation : - "Finch said : The France's AAA Rating (that even USA lost recently) has a "Stable Perspective".

- "Naturally, if the Crisis of Sovereign Debts in €uroZone continued to be aggravated, this could pose a Problem for Everybody, and not simply for France", as Sarkozy said just one Day after Financial Markets astonishingly started even to attack ... Germany's own Bonds'emmissions, the latest one remaining partly uncovered, as it was reported even from the Economically most Performant big Country in the World).. . And that's why we are, precisely, in the process of currently working on that", he reminded, noding towards the German Chancellor Merkel and their on-going cooperation to modify the (EU) Treaties, (comp. Supra).
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Questions by journalists focused mainly on continuing debates about whether ECB should, or not, intervene in order to help some €uroZone Countries, and, if yes, under which conditions, as well as about the so-called "EuroBonds" or "Stability Bonds", as those recently proposed also by EU Commission, etc.

On both these points, Sarkozy didn't reveal the current state of Negotiations between France, Germany and others, confirming, simply, that it still goes on, even if they are approaching to conclude an agreement soon.

+ For the time being, "we indicated, all three of us, in a common Agreement, our trust to the ECB and to its leaders. And, all three of us, indicated that, in order to respect the independence of this essential Instritution, all should abstain from making any demands, positifs or negatifs", the French President declared from the start, as fas as speculations and recent debates about the role of €urozone's Central Bank, headquartered at nearby Frankfurt, is concerned.

- "It's a position that we adopted all together, which is adapted to the situation", and "has its Meaning", Sarkozy later underlined :

- "When we say that we Trust the ECB, and that we'll abstain from any Remark, positive or negative, this has a Meaning  : It's called a "Positive Compromise, where everyone tries to understand eachother's situation", he significantly said, evoking a Main Points that he had presented from the start among the outcomes of Strasbourg's Tripartite Summit, Germany - France - Italy, (See supra).

For the rest, the French President just stressed that, in view of the importance of what is at stake, serious and far-looking decisions have to be taken in order to definitively settle these issues :

- "in order to find an agreement, and, mainly, in order to arrive to  the conclusions of a very Serious Crisis, we doN't want to experience again this kind of events that Europe is currently facing !".  - "It's in this spirit that we are working", he simply indicated.  
But for the rest, he stayed rather Tight-lipped, at least for the moment, only revealing that some "Proposals have Advanced" :

-  As  "I told you ...we are working on some Proposals, which have advanced a lot, (and) that we'll present before Brussels' meeting of December 9. I've nothing more to add on ECB to what I said from the start, and on which there is an agreement between President Monti, Chancellor Merkel, and myself", French President Sarkozy replied.

"As for the Details of those proposals, well, when we'll present them, we'll give them to you", he promissed. "It wasn't the aim of this meeting, today", he explained. "Concerning the (EU) Treaty Modifications, it's a work on which we are working almost everyday together, our teams (of Experts), the (German) Chancellor and myself. It's practically all the days that we exchange views", he revealed carefully.

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- "The French President is absolutely Right for what he said. He explained that the ECB is Independent....So, the eventual Modifications of the (EU)Treaty do not concern the ECB, which deals with Monetary Policy and the Monetary Stability. In the Modifications of the Treaty, as we'll show later-on, we are dealing with the Fiscal policy and, so, with a Deeper Cooperation on Political issues", the German Chancellor clarified.

- "So, it's a differend issue, on which there will be Proposals, but this has Nothing to do with the ECB", she said, replying a priori negatively to a Journalist's question whether ECB's role will be included among the desired EU Treaty Modifications on December 9.

- It's true that "f.ex., on Institutions such as the ECB, we (France and Germany) don't have the same History. It's a Reality. It's worthless to deny it", Sarkozy honestly admitted, But, we must try to understand, and find a Common Point", the French President wisely stressed.

"F.ex., Germany has a Tradition, a History, a Culture. France has another one. And we try to understand eachother, and Converge towards the Same Point. In order to find anew the Trust that €uroZone must  inspire" to People. And "we have now, thanks to President Monti, the Chance to have together with as (even) EU's 3rd Economy, in order to create the more Stable Pole" of all, Sarkozy pointed, realistically but positively, towards €urozone's huge Potential.

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+ On another Journalist's Question, if Germany's current redusal of €uroBonds might change, or not, when Berlin would have obtained satisfaction as far as the EU Treaty Modifications are concerned (See supra), so that "a knd of Compromise" between these two issues might be made, Merkel initially refused such a deal as inadequate :

-  "No, it's not about giving something, and taking something else in exchange. When we have Weaknesses in the Construction of €uroZone, we must (all) try to overcome them"
- "And these weaknesses (on €uroZone) might be due, precisely, to the lack of a Political Deepening" of €urozone's integration, the German Chancellor pointed out.

- "So, my position, compared to yesterday (at the Bundestag), hasn't changed", she said.

+ "If we make certain steps towards a Fiscal Union, mainly to Strengthen the Stability and Growth Pact, this might be another Stage, but it isn't a precondition for me to change the position that I explained yesterday to the Bundestag. So, I think that we are far away from looking at all the Revenue and Expenditure Policies, in order to have them together : No, each country has its own Budget", Merkel concluded on that point.

+ "But we can make legally Accountable, in the Future, those who do not respect the Stability and Growth Pact, because we have experienced many Violations of the Stability and Growth Pact, even from the side of Germany, and there wasn't any way to lodge a Complaint, to impose a Sanction, so that Today we pay a Heavy Price", for some Errors of the Past. - "So, we must prevent such kind of situations from being repeated again" in the Future.

-"This has Nothing to do with my position on EuroBonds or EuroObligations. I don't think that the are necessary, (and) the preconditions are not yet there, so I don't change my position", she sharply distinguished, without going into details.

+ Later on, the German Chancellor added that, in her view, even if EU Commission's recent "Proposals for Budget Discipline.... are all Welcome", nevertheless, concerning "the Stability Bonds, or EuroBonds, whatever name one might give them, (they) will do just one thing : Rates' Difference would be probably Nivelled. And, in my opinion, this wouldn't be the right signal. Because we mustn't put between brackets the Rates' Differences, since they clearly indicate where we must act and/or contiue to act", she criticized.

- "So, we must win back Trust, in order to find anew the situation which existed before the Crisis : I.e. when the Rates were all the same for whatever Country in Europe, according to Markets' appreciation. To speak roughly, I don't think that it's the good solution. That's why I expressed that  position yesterday at the Bundestag", Merkel explained.

But, apparently, this wasn't her last word on this matter, since she later added something interesting after a relevant observation made, meanwhile by Monti :
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+ However, new Italian Prime Minister, and twice EU Commissioner, Professor Mario Monti, replying later to a similar question, preferred to place it in another Context, from a somehow differend point of view, particularly on recurrent and limited on Time, Economic Production "Cycles"  :  

- "I think that this Question also raised a more General Issue, which goes for all the Economy of the World, and not only for the European Economy :

- "You ask me what might happen, whether we  might have a more Serious Recession than initially scheduled, (and) whether the Financial Aims should be revised in order to take into account the effects of the (production's) cycle".

- "It's a very well known Question, that the entire EU may raise to itself", Monti observed ! - "How could we adjust the Economic Policy Programs of European Countries by taking into account this (Economic) Cycle ?".

- "It's In this regard, that "you ask me my (current) position on EuroBonds or EuroObligations (See supra) :  

- "I want to underline what has been said by Mrs Merkel : We (€urozone Countries) must orientate ourselves towards a Fiscal Union, if we want to give a greater Stability to "€urozone". For that purpose, we must have reliant Mechanisms for the implementation of Rules that we'll adopt. In this framework, there is also the issue of Treaties' Modification, etc.", he reminded (See supra).

=>  But, what is important is that, according to Professor Monti's opinion, "In this context, ... there are several matters which can be un-dramatized  : F.ex., the "Stability Bonds", as EU Commission names them, could, indeed, bring a contribution, in the framework of a Fiscal Union", he declared.

- However, "we must be careful, because several things which coud be useful, wouldn't work if we [€urozone Countries) don't arrive into a REAL Fiscal Union", warned Monti, apparently suggesting that Merkel's wish for Fiscal convergence, Sanctions against violations of the Stability Pact, etc., advance deeply enough (comp. supra).

+ In this regard, Monti also chose to reply to an adjacent question on "Automatic Sanctions" against those who violate €urozone's Stability Pact, by expressing his ardent wish to establish such a Mechanism, in order to efficiently convince all Member States' Governments to respect the Rules, by placing them under a threat to be, otherwise, attacked by a complaint to EU's Court of Justice, (See other "EuroFora"s NewStory from this Trilateral Summit, attached hereby).

Nevertheless, Monti, who is also founder of the prestigious "Bruegel" Economic Think Tank in Brussels, (named after the Historic Flamish painters and created in 2005 after a Franco-German initiative), and President of the famous Bocconi University at Milan, and had made various statements to "EuroFora"s founder in the Past, when he was EU Commissioner initially for Market/Trade and afterwards of Competition, between 1994 and 2004, (i.e. with a precious 10 Years EU Commission experience), didn't explain further this apparently interesting point, through which a compromise might be eventually possible.
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=> Reacting on this point made by Monti, who added an "Automaticity of Sanctions", German Chancellor Angie Merkel, observed that "we are not already there with the Stability and Growth Pact", as it currently stands, but "I think that we must work through a Modification of the (EU) Treaty, in order to achieve that".

- "Mario Monti was earlier (EU) Commissioner on Competition. And Competition (EU) Rules are much more strict than those of the Stability and Growth Pact. Everybody knows, that; concerning Competition you'd better keep the rules, otherwise there is a Complaint (to EU Court of Justice), without any "Mercy" in this case. When Monti was (EU) Commissioner, we had spoken about that, and it's something which applied also to Germany : We weren't always satisfied about the decisions taken by EU Commission on Competition, but we knew that we were going to most probably loose before the (EU) Court (of Justice), and  we immediately respected the Rules", she reminded.

>>> Therefore, in order to obtain a similar Mechanism of Sanctions also for violations of €urozone's Stability Pact, we "need a Group of (€urozone Member) Countries .... to work in that direction, first, with utmost Determination in order to reach that stage", probably "via such Treaty modifications", and/or in any other way legally possible, the German Chancellor concluded, while significantly leaving open, in that case, the related question about whether she might accept some kind of "EuroBonds" or ECB action, etc. in exchange.... (See infra and supra).
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=> - "All such Proposals are part of an overall Synthesis : It isn't useful, it might even be dangerous, if someone proposes EuroBonds without speaking about Governance. Or, speak about Governance and Sanctions, without speaking about the other side. This is a coherent whole, that we shall present in the following Days, and it's this entire entity,  which will povide Trust", Sarkozy concluded, at this crucial point, by giving a Rendez-vous...
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However, it's worth noting that Merkel, while clearly refusing any link between a scheduled EU Treaty Modification in order to strengthen Discipline for €urozone's Stability, from one side, and ECB's interventions, on the other side, on the contrary, even if she reiterated her refusal also for EuroBonds in exchange of EU Commission's welcome but limited Proposals to strengthen the Stability Pact, nevertheless, the German Chancellor, speaking in conclusion, didn't say anything at all on the possibility to establish, or not, some kind of link between €urozone Governance which could achieve "a Real Fiscal Union", (as Monti stressed), including even "Automaticity of Sanctions", etc. (See supra), and/or other Integration advances, eventually with an adequate formula close to EuroBonds or equivalent.

The fact that, unlike ECB's eventual role in exchange of more Discipline with the Treaty Modification measures currently drafted, and EU Commision's welcome but insufficient proposals to stregthen the Stability Pact, in exchange of EuroBonds, where she explicitly rejected it, on the contrary, here, Merkel didn't say anything of that sort, (See supra), apparentlly leaves an open window for on-going negotiations to find the horizon of a breakthrough.

Monti earlier, had carefully warned that f.ex. EuroBonds might even be dangerous, unless if, at the same time, €urozone succeeded to reach a kind of what he called as "Real Fiscal Union".

Sarkozy also, speaking at the very end of the Tripartite Summit's Press Conference conclusion, significantly focused into possibe linking the Discipline/Integration issues to some kind of more Financial solidarity or union between €urozone Member Countries in the context of an "overall Synthesis", where could be crafted a winning formula.

+ Moreover, an important point in practice obviously is the factor Time : Any formula requiring EU Treaty's Modification may take too much time in order to be concluded, ratifications included, while Financial Markets move fast. Moreover, it might not have the agreement of all 27 EU Countries, (even with a UK etc. opt-out, f.ex.).

Probably that's why both Sarkozy and Merkel, at differend moments, but during this same Strasbourg's Tripartite Summit between the 3 Biggest €uroZone Counties, apparently evoked an Alternative possibility for a Pioneer "Group" of €urozone Members to resolutely advance ahead towards considerably more Integration, including more Discipline and Solidarity :

=> F.ex. by starting to use Lisbon Treaty's potential for "Reinforced Cooperations" between a certain number of Countries, which have the practical advantage not to oblige to wait necessarily until a full modification of the Treaty might be concluded, at least for certain Urgent issues :

- "in order to Change, we must propose (certain) Modifications to the Treaties, so that eveybody (among the currently  17 €urozone Member States+) can be associated. But, "if there were any Refusals, then, we migh have anOther Strategy to (EU) Treaties' Modifications, which could, then, be, an InterGovernemental Treaty. We are working on that", Sarkozy revealed.

- Speaking later on the "automaticity of Sanctions" for serious violations of the "Stability and Growth Pact", Merkel also stressed that  : - "We (€urozone) are not already there ...

=> - "This needs a Group of Countries, which have a Common Currency, to work in that direction first, with utmost Determination, in order to reach that Stage via such modifications of the agreements", as she said, just before Sarkozy concludes the Press Conference by speaking about "an overall Synthesis" of Proposals due to be made Soon, (Comp. supra).

 
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+ Franco-German support  to Mario Monti's ITALY :
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+ Meanwhile, concerning in particular Italy itself, French President Nicolas Sarkozy stressed from the outset that "the 1st aim of this (Trilateral, Franco-Germano-Italian Summit of the 3 biggest €urozone Countries in Strasbourg) is to mark and underline our will to support and help the New Italian Government, chaired by President Mario Monti. Both France and Germany, we want to mark our Trust to the Italian Government", as he clearly said.

- "We (France and Germany) were happy to meet anew with Mario Monti, after having worked together some years ago, whom we fully trust in front of the important task that he assumed, and that we feel as a personal Friend", Sarkozy added.

- "For all of us it was, naturally, interesting to know, at first hand, what is the Agenda of the New Italian Government. Of course it's about Financial Stablisaton, but also about Structural Reforms, which, I'm convinced, will bring back Growth, that is necessary for Jobs and for fighting against Unemployment. President Monti has all our support for his work, which is not easy, and we thank him also for his invitation  to Rome", added German Chancellor Angie Merkel.

-  "We had very intensive discussions", where "I stressed Italy's interest for strict Financial Stabilisation in the shortest term, and I confirmed the aim of a balanced Budget for 2013. This must be made in a Sustainable way. I had also a profound and interesting Discussion with the Chancellor and the President. This also implies an Economic Growth, ensuring a good Sustainability of the (current) Budget's imbalances, a growth which mustn't be Inflationist, and that requires Structural Reforms. So, I presented to my two interlocutors the pathway of Reforms I intend to adopt, and I indicated the scheduled Dates for their realization, for which we (the New Italian Government) will associate all Political and Social partners, as we already started to do", the new Italian Prime Minister Mario Monti Monti revealed, (but without entering into concrete details yet).

+ "As you know, Italy (currently) has a considerable Budget Surplus, due to be almost + 5,7% in 2014", Monti surprised by revealing such a Positive, but widely ignored, interesting fact...

 - However, Italy has also to make great efforts in he Future, because of an important Public Debt, which is a "Heritage of the Past", he denounced.

- "There are Targets which have been fixed for each (€urozone Member) Country. In the case of Italy, it's about returning back to a Budgetary Equilibrium on 2013". Thus, "in order for that aim to Return to a balanced Budget on 2014 not to be droped", "Italy has to determine certain Ambitious Targets", Monti confirmed.

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Finally, to put it in a nutshell, in €uroZone, the problem is not the "€uro" itself, but the .. "Zone" !

I.e., if we had more of a well-integrated Down-Town residential, administrative and/or business sector, with well-designed public areas, and a coherent, overall structure, able to bring real Cohesion to inhabitants etc., instead of a lot of neglected and/or more or less isolated, sometimes chaotic or turbulant suburbs, with some kind of "Ghettos" often dangerously abandoned even to foreign interferences, manipulation, pressures, etc., then, €urozone's great potential could be really developed !.. 

Anyway, it's a fact that this exceptional Tripartite Summit of the 3 Biggest €urozone Countries attracted much more Journalists, particularly among those regularly following EU issues, than the organizers had initially thought, so that even Strasbourg Opera's superbe 3rd Floor reception room appeared too "small" for the event..

Was it, perhaps, for such reasons, related to €urozone's potential, that Journalists, including "EuroFora", were surprised to hear German chancellor Angie Merkel to denounce to Sarkozy a kind of technical Sabotage of her Airplane to Strasbourg because something or someone had "broken" its machine at a Berlin's maintenance hangar ?... - "We sat and waited, but nothing happened, until someone found that the Plane's machine had been broken, and had to be repaired in order to work well, she was heard to (symbolically) explain...

A busy-looking Sarkozy had arrived a little-bit earlier than scheduled, welcomed Monti, and patiently waited for Merkel, who succeeded to overcome that unprecedented incident  just a few minutes later.

However, the Joint Tripartite session, with a working Lunch, etc, took longer than expected, postponing the meeting with Journalists, including "EuroFora", for quite later in the afternoon.