I think I have seen this movie before, on the way to conquering Europe Germany is diverted into baby sitting the Vichy French and saving Italy from incompetence. From The Guardian:
Angela Merkel and Nicolas Sarkozy, the German chancellor and French president, will meet in Paris on Monday to thrash out a deal on fiscal union that they hope will bring long-term stability to the currency zone. The blueprint will be presented to other European leaders at a Brussels summit at the end of the week.
Financial markets are also expecting an interest rate cut from the European Central Bank on Thursday to give floundering euro economies a much-needed shot in the arm.
After months of deepening gloom that saw the eurozone lurch closer to recession and potential disintegration, a hint of optimism is in the air. There is a feeling in European capitals that moves to transform the currency union into a fiscal union, with greater centralised control over the tax-and-spend policies of the 17 member countries, could be the beginning of a solution for the debt crisis and calm the markets.
Merkel spelled out her proposals for fiscal union in a speech to the German parliament last week, and ECB president Mario Draghi has talked of the need for a "fiscal compact".
"They are clearly getting closer; they're singing perhaps not from the same hymn sheet, but their differences are not irreconcilable," said Grant Lewis, head of economic research at Daiwa Capital Markets. "Hopefully by Friday we'll have an agreement in principle." He noted, however, that the problems would start when politicians got down to the details at committee level. "The coming week may not be too bad for markets, but that doesn't mean the crisis is over. Ultimately what people want is eurobonds – effectively a German guarantee on Italian debt."......read on
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