Surrender never comes easily to Germany, whether on the football pitch, where it crashed out of the European championships against Italy, or in Brussels, where Angela Merkel has for months been the Nein Chancellor, resisting all pleas for a Euro bail-out.
Having repeatedly refused southern European demands for help, Mrs Merkel found herself saying yes in the early hours of yesterday. The Mediterranean states called her bluff, and won. Mrs Merkel has agreed to the use of European rescue funds both for direct bail‑outs of troubled banks and to provide relief to indebted governments. She also agreed a limited form of banking union, and made concessions over the terms of the Spanish and Irish bail-outs.
Given the low expectations many had of the summit in Brussels, this was quite a capitulation. Yet despite the ecstatic reaction of the markets yesterday, no one should be in any doubt that the eurozone remains a long way short of plausible and lasting solutions.
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VN:F [1.9.22_1171]Editorial: Merkel’s retreat will not solve Europe’s problems (15),