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ANGELA MERKEL

Merkel resists pressure to relax austerity

Germany and France crossed swords Wednesday over how to spur growth in the debt-stricken eurozone at an EU summit overshadowed by plunging markets and the euro hitting a near two-year low.

Merkel resists pressure to relax austerity
Photo: DPA

“We have to act straight away for growth,” French President Francois Hollande insisted amid deepening worries over Greece’s eurozone future and Spain’s troubled banks. “Otherwise there will still be doubt on the markets.”

“We have no time to waste,” the freshly elected Socialist leader stressed at his first EU summit after a cost-conscious train ride from Paris.

German Chancellor Angela Merkel faced pressure to give ground on her hardline austerity doctrine as the European single currency fell to $1.2564 and London, Frankfurt and Paris stock exchanges each shed well over two percent.

She also rejected a call by Hollande for eurobonds – jointly pooled eurozone debt – on the grounds they are “not a contribution to stimulating growth in the eurozone” and adding that such instruments ran contrary to EU treaties.

Berlin fears eurobonds would leave German taxpayers permanently underwriting the public finances of weaker eurozone economies.

Yet in a German press interview appearing on Thursday, Merkel’s finance minister Wolfgang Schäuble maintained that “the differences between ourselves and France are not so great.”

Schäuble said Hollande wants more done to kick-start growth, but insisted that the French president “does not want to water down” a treaty obliging balanced budgets the Frenchman initially said he wanted to re-negotiate.

“We’re not talking about an easing of budgetary discipline,” Schäuble insisted.

A member of Hollande’s entourage said he was “floating ideas” but “not coming to Brussels with a Kalashnikov.”

Non-euro Britain also flexed its muscles, ruling out in advance other core ideas put forward by European Union officials and backed by Hollande – including a tax on financial transactions.

Home to three quarters of Europe’s financial services industry, London vehemently rejects the tax.

Opening the dinner talks, EU president Herman Van Rompuy underlined the need to find “a strong will to compromise” with the risk of knock-on effects from a Greek eurozone exit exercising markets.

After Germany’s central bank said the picture in Athens ahead of June 17 elections was “highly alarming,” leaders were expected to remind Greek voters that they expect Athens to honour a €237 billion ($300 billion) bailout deal agreed in March.

“I don’t believe we can afford to allow this issue to be endlessly fudged or put off,” said British Prime Minister David Cameron, urging the European Central Bank (ECB) to do more.

Treasury officials from the other 16 eurozone member states were told this week to “reflect” on what an exit would mean for their economies, a diplomat from one eurozone country told AFP.

The Greek finance ministry in Athens “categorically” denied this was the case.

Contingency planning that diplomats called “commonsense” stems from arguably greater worries about Spain and Italy, after a report by Fitch Rating agency showed foreign investors had fled Spanish and Italian debt in huge numbers.

Spanish Prime Minister Mariano Rajoy said Spain did not require the support of European rescue funds, saying there were “faster instruments” – an apparent allusion to the ECB which has previously bought government bonds in sell-on markets.

Analysts see this as inevitable, with consultant Sony Kapoor warning that Spain otherwise “is headed towards needing a fully-fledged bailout.”

Wednesday’s talks were set to endorse a trial for €230 million in seed money from the EU’s budget this year and next by way of EU “project bonds.”

This is intended to attract €4.5 billion of long-term private investment for Europe’s incomplete energy, transport and digital networks.

Other ideas on the table included a €10-billion boost to European Investment Bank (EIB).

AFP/hc

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POLITICS

Sleep, seaside, potato soup: What will Merkel do next?

 After 16 years in charge of Europe's biggest economy, the first thing Angela Merkel wants to do when she retires from politics is take "a little nap". But what about after that?

Outgoing German Chancellor Angela Merkel briefly closes her eyes and smiles at a 2018 press conference in Berlin.
Outgoing German Chancellor Angela Merkel briefly closes her eyes at a 2018 press conference in Berlin. Aside from plans to take "a little nap" after retiring this week, she hasn't given much away about what she might do next. Tobias SCHWARZ / AFP

The veteran chancellor has been tight-lipped about what she will do after handing over the reins to her successor Olaf Scholz on December 8th.

During her four terms in office, 67-year-old Merkel was often described as the most powerful woman in the world — but she hinted recently that she will not miss being in charge.

“I will understand very quickly that all this is now someone else’s responsibility. And I think I’m going to like that situation a lot,” she said during a trip to Washington this summer.

Famous for her stamina and her ability to remain fresh after all-night meetings, Merkel once said she can store sleep like a camel stores water.

But when asked about her retirement in Washington, she replied: “Maybe I’ll try to read something, then my eyes will start to close because I’m tired, so I’ll take a little nap, and then we’ll see where I show up.”

READ ALSO: ‘Eternal’ chancellor: Germany’s Merkel to hand over power
READ ALSO: The Merkel-Raute: How a hand gesture became a brand

‘See what happens’
First elected as an MP in 1990, just after German reunification, Merkel recently suggested she had never had time to stop and reflect on what else she might like to do.

“I have never had a normal working day and… I have naturally stopped asking myself what interests me most outside politics,” she told an audience during a joint interview with Nigerian writer Chimamanda Ngozi Adichie.

“As I have reached the age of 67, I don’t have an infinite amount of time left. This means that I want to think carefully about what I want to do in the next phase of my life,” she said.

“Do I want to write, do I want to speak, do I want to go hiking, do I want to stay at home, do I want to see the world? I’ve decided to just do nothing to begin with and see what happens.”

Merkel’s predecessors have not stayed quiet for long. Helmut Schmidt, who left the chancellery in 1982, became co-editor of the weekly newspaper Die Zeit and a popular commentator on political life.

Helmut Kohl set up his own consultancy firm and Gerhard Schroeder became a lobbyist, taking a controversial position as chairman of the board of the Russian oil giant Rosneft.

German writer David Safier has imagined a more eccentric future for Merkel, penning a crime novel called Miss Merkel: Mord in der Uckermark  that sees her tempted out of retirement to investigate a mysterious murder.

German Chancellor Angela Merkel forms her trademark hand gesture, the so-called “Merkel-Raute” (known in English as the Merkel rhombus, Merkel diamond or Triangle of Power). (Photo by Tobias SCHWARZ / AFP)
 

Planting vegetables
Merkel may wish to spend more time with her husband Joachim Sauer in Hohenwalde, near Templin in the former East Germany where she grew up, and where she has a holiday home that she retreats to when she’s weary.

Among the leisure activities she may undertake there is vegetable, and especially, potato planting, something that she once told Bunte magazine in an interview in 2013 that she enjoyed doing.

She is also known to be a fan of the volcanic island of D’Ischia, especially the remote seaside village of Sant’Angelo.

Merkel was captured on a smartphone video this week browsing the footwear in a Berlin sportswear store, leading to speculation that she may be planning something active.

Or the former scientist could embark on a speaking tour of the countless universities from Seoul to Tel Aviv that have awarded her honorary doctorates.

Merkel is set to receive a monthly pension of around 15,000 euros ($16,900) in her retirement, according to a calculation by the German Taxpayers’ Association.

But she has never been one for lavish spending, living in a fourth-floor apartment in Berlin and often doing her own grocery shopping.

In 2014, she even took Chinese Premier Li Keqiang to her favourite supermarket in Berlin after a bilateral meeting.

So perhaps she will simply spend some quiet nights in sipping her beloved white wine and whipping up the dish she once declared as her favourite, a “really good potato soup”.

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