Photo: AP/Michel Euler, Pool
We’ve been using the moniker “Merkozy” to denote German Chancellor Angela Merkel and French President Nicolas Sarkozy–the leaders of the eurozone’s two largest economies and the centre of European politics right now.But that love affair–and nickname–might be over.
A meeting and press conference between Merkel, Sarkozy, and new Italian PM Mario Monti this morning has left many journalists and economists following euro area developments wondering whether the Italian is about to join the party.
They quickly dubbed the trio “Merkonti.”
Unlike his predecessor Silvio Berlusconi, Monti appears to be a staid and disciplined figure. His work as the European Commissioner for Competition even earned him the nickname “Supermario” in the Italian press. And as the leader of the euro area’s third-largest economy and one that is deeply in debt, his policies will be fundamental to his success in leading the country out of crisis.
The participation of Monti, however, unsettles the delicate balance between French and German leadership. At first blush, he favours a hard-line stance against eurobonds and expanding the role of the European Central Bank. In a press conference by the three leaders this morning, he said both these proposals were not applicable at the present moment.
However, Germany has clearly shown the least interest in taking action to stem crisis in peripheral Europe, and thus Italy. After saying he sided with Merkel on eurobonds, Monti also qualified that they might be a solution after changes were made to fiscal integration. Merkel’s subsequent response, we noted, was quite heated. Sarkozy may have a new ally.
Monti is still in the early days of his tenure, so it remains to be seen what his views will be. Regardless of how he tips the scale, this could be a decisive moment for the balance of power in Europe.
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