German Chancellor Angela Merkel met with President Nicolas Sarkozy and Italian PM Mario Monti today, and it looks like all these proposals for massive intervention by the European Central Bank are not going anywhere.
European markets are off sharply on those statements.
In a press conference following their meeting (livestream via France 24), Merkel and Sarkozy said that changes to the EU treaties are forthcoming before the next EU summit on December 9, but they have absolutely nothing to do with the ECB.
Sarkozy qualified this as a “compromise” on his part, suggesting that he was not so happy about this development. The changes, instead, will be alterations to governance mechanisms in the eurozone. They provided few details about exactly what these changes would entail, however.
The leaders’ comments on eurobonds were more ambiguous. Merkel reiterated her rejection yesterday to the idea, but Monti suggested that the idea could be a good way to ease the crisis–after stronger fiscal integration.
Monti’s apparent openness to the idea seemed to anger the German leader–the newest sign that this debate around eurobonds is really heating up.