Where Germany, France disagree on European debt
by The BBC’s Jonny Dymond for Marketplace
French President Nicholas Sarkozy and German Chancellor Angela Merkel meet today with Europe’s debt crisis on their agenda. Germany and France are leading the conversation to get indebted European countries out of financial struggle, but the two powers don’t quite see eye-to-eye.
The Germans are not at all happy they’re now being asked to bail out free-spending Greeks, Spaniards and Portuguese. They want new rules that would punish debt laden countries. The French instead would like to move towards what they’ve always really wanted the single European currency to be: a single European economic government. And while the Germans are talking tough over cuts in public spending, the French are wary about cutting deficits too far, too fast.
Even so, French Finance Minister Christine Lagarde reckons the European public, battered by bad news, can be brought along. “If the politicians have the courage to say what the reality is, what the challenges are, what he risks are, then public opinion is very smart, and people understand,” she says.
France and Germany are used to setting the agenda as the Eurozone’s largest economies. But if they struggle to find common ground it could stall a recovery for the U.S.’s biggest trading partner.
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