Europe likes to play lip service to the idea of compromise and multilateral-ism, but look who’s really in charge these days.
Angela Merkel, the Iron Chancellor of Germany, initially put herself in a difficult and lonely position when she stubbornly argued for IMF involvement in any bailout or implied financial backing for Greece. Most of Europe was horrified, initially:
By sticking to her concept of IMF involvement, Merkel triggered a new escalation in her struggle against the rest of Europe. Most EU governments — and her finance minister, Schäuble — have argued that intervention by the Washington-based IMF would represent a failure on the part of the EU. Instead, they want Greece’s debt problems to remain in the family. The European Central Bank (ECB) is likewise concerned that, should the IMF gain influence over European budget policy, it could lose some of its independence.
Yet France has capitulated and is now on board:
The French government says it is open to including the International Monetary Fund (IMF) in an emergency plan for Athens, an idea Merkel has repeatedly brought up recently. Given the prevailing reservations about a euro-zone country turning to the IMF, the chancellor could chalk up Paris’s concession as a resounding success.
Which means the rest of the Eurozone is likely to follow. Lesson learned? There’s no real Eurozone rescue plan without Germany, and Merkel was very well aware of this.