Germany

The longer this Greek crisis goes on, the clearer the various agendas at play are becoming. As the Greek finance minister said earlier, the actions of the Eurozone’s northern faction — led by Germany — do suggest that it wants Greece out of the euro. As I’ve blogged previously, the Germans believe that with Monti in charge of Italy and a new centre-right government in Spain, the effects of Greece leaving the euro could be contained. But this is a big risk. After all, Lehman Brothers was allowed to go bust because it was believed that it was safe to do so. Certainly, the other eurozone countries are no longer even pretending to respect Greek democracy.

How about this for a claim by Nicolas Sarkozy, made in a TV appearance yesterday? ‘Europe is no longer at the edge of the cliff.’ It's quite some statement, so let's hear it again: ‘Europe is no longer at the edge of the cliff.’ Of course, Sarkozy has reasons for saying it beyond mere pre-electoral braggadocio: the rates paid on Italian and Spanish 10-year bonds have generally been falling since the the beginning of the year; the euro has been making some tentative progress against other currencies; and so on. But it still constrasts heavily with much else that is being said around the eurozone. Only last week, Angela Merkel was talking of the overall failure to ‘stabilise the situation’ in Greece.

The story being briefed out of the year’s first Franco-German Summit is that President Nicolas Sarkozy won the backing of Chancellor Angela Merkel for a tax on financial transactions, a levy that the British government objects to and that Ernst and Young say would leave a €116bn hole in Europe’s public finances. But before the City begins building barricades and the PM puts on his bulldog mask, it is worth taking another look at the news from Berlin. For no sooner had the agreement been announced than the tax was rejected by Chancellor Merkel's junior coalition partner, the pro-business Free Democrats, who say they will only back a Europe-wide tax scheme. They are not alone. The Netherlands and Ireland feel the same.

If it was not all so serious, the efforts to save the single currency would be worthy of a comic opera: the Germans could compose the score, the Italians could write the libretto, and the French could take care of the stage directions. The latest IMF-related effort is, perhaps, best described by the website ZeroHedge, which is required reading during these troubled times: “Germany will be responsible for €41.5 bn, France at €31.4 billion, and Italy will need to provide €23.5 billion and Spain another €15 billion.

Judging from much of the coverage in UK media, you would be forgiven for thinking that Britain is on the fast track to becoming the North Korea of Europe — eccentric and completely isolated from the rest of the world. Indeed, the media narrative over the past couple of days has largely treated the agreement reached at the summit as concrete, supported in full by everyone apart from Britain. Or ‘27-minus’, as Commission President Jose Manuel Barroso put it. The reality, of course, is quite different. Leaving aside whether Cameron could have played his cards better (he could have), as Gideon Rachman pointed out in yesterday’s FT, ‘the picture of an isolated Britain’ will become blurred as the rest of Europe grapples with the Merkozy deal.