03 July, 2012

German Dominance in Doubt after Summit Defeat - SPIEGEL ONLINE

German Dominance in Doubt after Summit Defeat - SPIEGEL ONLINE: Monti, a former European Union competition commissioner, managed to defeat Merkel with her own weapons. He blocked a €120 billion ($150 billion) growth pact until the Friday morning. He knew that Merkel could not go home without the package. She needed it in order to get the center-left Social Democratic Party (SPD) and the Green Party to support the fiscal pact, which is intended to force signatory countries to practice strict budgetary discipline, in a key parliamentary vote on Friday. (In the end, the fiscal pact passed with the necessary two-thirds majority.)

Monti was able to prevail because he had a powerful ally. The balance of power in Europe has shifted since new French President Fran�ois Hollande came into office. His predecessor, Nicolas Sarkozy, had usually supported the German position in the end. But Hollande has forced Merkel onto the defensive with his own proposals, securing Spain and Italy as important allies.