The election of François Hollande as French president has excited some of those who blame Germany’s emphasis on fiscal austerity for many of the eurozone’s ills. Hollande has promised to refocus EU policies on growth and employment. But can Hollande – as he prepares for his first ever meeting with Chancellor Angela Merkel – really make a difference? Maybe, if he handles Merkel with great diplomatic dexterity, writes the CER’s Charles Grant.
Eurozone policy-makers, especially German and Dutch ones, have been unable to rise above hubris and moral posturing, leaving the eurozone with very little ammunition to confront the coming financial storm. They have stubbornly dug in their feet, preferring to deepen the crisis than to admit their mistakes, making a fracturing of the eurozone almost inevitable, writes CER chief ecomist Simon Tilford.