All eyes in Europe are on tomorrow’s big meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel. In Paris tomorrow, both leaders will talk economic policy and new measures to bolster the creaky foundations of the eurozone.According to the Guardian, France hopes the meeting will send a strong statement. Germany just wants to play down its importance.
Here’s what they will — and will not — discuss:
– Despite speculation to the contrary, euro bonds are NOT on the table. Both leaders are resistant to the issuance of common eurozone bonds and their administrations have made that crystal clear today. Here are answers to everything you always wanted to know about euro bonds but were afraid to ask >
– Unity — per usual — is likely to top the agenda. While we won’t see any groundbreaking changes, signs abound that a solution to the sovereign debt crisis will necessitate some kind of expansion in central banking powers. Steffen Seibert told Bloomberg that reconciling interest rate disparities was a medium-term goal.
– Merkel and Sarkozy will discuss tougher rules for profligate spenders like the PIIGS. The Telegraph calls this the focus of the meeting, but it’s a moot point since all the PIIGS countries have been bragging about the success of their austerity measures.
– Merkel faces mounting dissent from the Bundestag, which is likely to weigh heavily on all proposals tomorrow. The Telegraph cites polls that find 59% of Germans are against further bailouts, a majority want Greece expelled from the euro, and 44% want out of the European Monetary Union.