France and Germany are making contradictory statements about the summit of eurozone leaders set to take place on Sunday, with France promising “important, very important decisions in the coming days” (via FT) and German officials downplaying the outcome of Sunday’s summit.
This suggests that there is still significant disagreement between Europe’s two most powerful countries, disagreement which could derail a comprehensive solution to the eurozone crisis anytime soon.
Confusion has escalated around the kind of comprehensive endgame — if any — that EU leaders will come up with this weekend, particularly after the Guardian reported that Germany and France had reached agreement on a plan that would give the EFSF €2 trillion in firepower to guarantee some losses on sovereign bonds.
However, German Finance Minister is dashing hopes for that plan, telling FT Deutschland that €1 trillion will be the upper limit for any EFSF leveraging. He has already been downplaying expectations for this weekend.
Whatever the case, it seems clear that Germany and France are going to have a lot of bickering to do this weekend.