NEW YORK | U.S. President clearly sided with pro-growth Europeans remarks in his final NATO summit remarks on Monday, urging the Old Continent to strenghten its defenses against financial market turmoil and recapitalize its banks. In a nutshell, these were his three darts.
Yes to a monetary policy “We’ve got to make sure that there is a growth strategy to go alongside the need for fiscal discipline, as well as a monetary policy that is promoting the capacity of countries like a Spain or an Italy to put in place very tough targets and some very tough policies,” he said.
A punch to European leaders, stating that the way to leave crisis behind is the American way: act firmly since the beginning, which is more efficient than the small steps strategy, as the two-year-European crisis shows. It is not the first time for him to point out Europe is still in a difficult place economically in part because it did not take some of the steps the U.S. did.
No money from Uncle Sam. Obama is only willing to give technical help and advice about how to stabilize markets.
Obama’s three darts are likely to resonate at this Wednesday’s EU summit in Brussels, where Germany and France have the upper hand. As the biggest economies in Europe, they should reduce concerns among investors that Greece may quit the euro, putting Spain and Italy at risk as well.
German Chancellor Angela Merkel, who many say seemed quite isolated during G8 last weekend, is under pressure but unbending. Hollande has urged her several times to consider the Eurobonds measure (he is expected to get support for euro bonds from the leaders of Spain, Italy and many smaller members of the 17-nation currency bloc). Her answer so far has been no. And she won’t shy away from disagreeing with him in Brussels either, she said.
However, some think that the strong 4.3 percent pay rise secured by IG Metall, Germany’s most powerful union, may mean that Berlin is starting to loosen the edges of its anti-inflation culture in order to foster domestic demand a little bit.