Is the gigantic euro bailout the start of a new leap forward in European integration? Or more of a sticking plaster? Either way, this seismic event did not come about without loss of face for more or less everyone involved. The €750bn (£640bn) package was greeted with euphoria mainly because this was the first time that the EU grasped the scale of the problem. Finally the bloc’s leaders understood that, without a proper defence of the euro, Greece—and perhaps other countries—would be pushed into default and German and French banks (which hold much of the debt) would suffer. That could have prompted more Lehman Brothers-style bankruptcies. But the eurozone had to be pulled kicking and screaming to reach a conclusion that was obvious to many other observers (see Bronwen Maddox’s article on the euro, p31). Germany’s chancellor Angela Merkel spent months dragging her feet over a bailout which was highly unpopular in her country. Her stalling had more than a little to do with looming regional elections in North Rhine-Westphalia. The markets knew that Merkel was not really on board with earlier, half-hearted “safety nets” and tested them to destruction. Ultimately it took the threat of a market meltdown for Germany and France to bury their differences—or rather, for Berlin to give way to Paris. According to one account, French president Nicolas Sarkozy banged his fist on the table at a summit and threatened to reconsider France’s participation in the euro. Getting Merkel to swallow the bailout also required the intervention of Barack Obama with a crucial phone call. Sarkozy had to eat some humble pie by conceding to the IMF playing a central role in the bailout. This he had resisted in part because it is headed by Dominique Strauss-Kahn, who is a potential rival in the next French presidential election. But while Sarko could claim some glory at least, the same could not be said for another Frenchman, Jean-Claude Trichet, president of the European Central Bank. Having refused to involve the ECB in buying government debt, Trichet ultimately had to perform a U-turn. But he only did so after pointing out that he has proved himself as the head of the bank, while the eurozone countries had failed to control their economies. Bizarrely, one of the few protagonists to emerge with much credit was Silvio Berlusconi. When several governments opposed the idea that much of the new bailout loans should be managed by the European commission, Italian officials, normally bystanders at big EU events, helped to come up with a solution. Their proposal for a “special purpose vehicle” to manage the fund was duly adopted. “Whatever you say about Berlusconi,” said one French official, “you have to admit he’s creative where finance is concerned.” Ashton’s disappearing act May was a good month for YouGov pollster and political expert Peter Kellner, who was all over the television thanks to the most exciting British election in years. The same cannot be said, however, for his wife, even though she is supposed to be the most senior British politician in the EU. Cathy Ashton, the bloc’s foreign policy chief, vanished from public view a couple of months ago after being mauled in the British and French press. She has still not resurfaced and EU officials joke about sending out search parties to find her. With the easing of the euro crisis, the media’s attention will turn to Ashton again soon. Last month her office had to deny rumours that she was about to resign. But this failed to quell speculation that she may not serve more than two and a half years—or less. After internal feuding led to the departure of Ashton’s spokesman, others are reluctant to take on what seems to be a poisoned chalice, and two well-qualified officials have turned the job down. All interview requests are being denied and, while Ashton continues to travel the globe, her profile sinks ever lower. Her only recent interaction with the press was a discussion with foreign editors in London. They were informed that the conversation was on “deepest background”—but emerged saying there would have been nothing to report even if Ashton’s every word had been on the record. Mandy admires Colbert One of Peter Mandelson’s final ministerial appearances in Paris involved an admission that the French may actually have a point about economic policy. During his time as European trade commissioner, he pursued a liberalising agenda. In general, he stood for the type of laissez-faire Anglo-Saxon capitalism that Sarkozy detests. To Mandelson, France represented everything that is wrong with overregulated, inflexible European economies. So there was surprise when, on a recent visit to the French ministry of finance, Mandelson stopped to admire a statue of Jean-Baptiste Colbert. The 17th-century minister to Louis XIV, Colbert famously sought to lock private activity into national regulation and prioritised state enterprise, especially in manufacturing. It’s not an approach British governments have championed—at least not until the economic crisis exposed the country’s overreliance on financial services. Perhaps, said Mandelson, his “late phase” in government would be slightly more Colbertian.
