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European Debt Crisis

Do multinational summits actually work?

Steve Chiotakis Dec 9, 2011

Steve Chiotakis: Today’s summit was the latest in a calendar full of debt crisis summits. But why did countries in Europe keep coming back to the table?

Katharina Gnath is an associate fellow over at the German Council on Foreign Relations. She’s with us now. Good morning.

Katharina Gnath: Good morning.

Chiotakis:This may not be, I guess, your area of expertise, but let me ask — was today’s European summit a success?

Gnath: Yes and no. It was a success in that almost everybody agreed to far reaching fiscal discipline measures. But it was not a success because especially Merkel and Sarkozy did not manage to get the U.K. on board — so that’s a big problem.

Chiotakis: You know, it seems like — I think this was the eighth time European Union leaders met to address this issue. Why did all those other summits fail, do you think?

Gnath: I think we have to see this as “learning on the job,” so to say. When the European monetary union — the euro — was founded, these problems weren’t forseen. So, while we are now going, we have to understand how markets react to this currency in times of crisis. So let’s see these summits as a way,  as a steep learning curve for the European leaders.

Chiotakis:What kind of elements do you think you need for a summit to be successful, specifically?

Gnath: You need to see the political will of the leaders to do something. I think that’s the big thing about the summits — you can’t do everything at once, you can’t solve all the details at the summits. So I think what the summits are much more about is to send a signal to the public and to the markets to say: look, we are sitting together, we are trying to find a common solution, and we are trying to stick with it. And then go home and try and explain it to the others. So I think this political momentum is the key thing to make a summit work or not.

Chiotakis: Katharina Gnath, who’s an associate fellow over at the German Council on Foreign Relations

Gnath: You’re welcome.

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