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Most viewed in EU governance
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Germany's decision last week to ban certain types of trading on its financial markets was the latest and perhaps most blatant example of unilateral action trumping European solidarity.
Ironically, Wolfgang Schäuble, Germany's finance minister, was working on plans for greater economic co-ordination in the eurozone last week when a ban was imposed on naked short selling of eurozone government bonds, credit default swaps and shares in Germany's top banks and financial institutions with effect from midnight on 19 May.
The move went down badly with finance ministers from other EU countries, who had attended a meeting with Schäuble in Brussels the previous day (18 May). Christine Lagarde, France's finance minister, said: “It seems to me that one ought to at least seek the advice of the other member states concerned by this measure.” She and her UK counterpart made it clear they would not be copying Germany's move.
In Berlin, politicians and officials defended the short-selling ban, saying that Michel Barnier, the European commissioner with responsibility for the financial markets, had made clear that there would not be draft legis-lation at EU level until October at the earliest. The government wanted to show it could “follow up its words with actions”, according to sources in Berlin.
On the same day, Angela Merkel also promised to push for a tax on financial transactions at global level, in line with demands made by the opposition parties and some of her own parliamentarians.
The main motivation for the short-selling ban was to boost support among German law-makers ahead of a vote on Germany's contribution to a eurozone stabilisation fund of €750 billion. The ban attempted to shift some of the blame for the eurozone's woes to financial speculators. The Social Demoratic Party and the Greens abstained from the vote in the federal parliament on Friday (21 May), having criticised Merkel's government for being slow to act. Some of her own party voted against the package, opposing the use of German taxpayers' funds to bail out profligate eurozone countries in southern Europe. Domestic political considerations clearly won out over the ideal of co-ordinated EU position.
11 February 2010: EU leaders agree to support Greece if it asks for help, but do not give figures. õ 15 March: Eurozone finance ministers agree outline of aid package for Greece, but still no figures.
25 March: Eurozone leaders agree joint rescue package for Greece with International Monetary Fund. No precise figures but eurozone to provide two-thirds of total.
11 April: Eurozone finance ministers agree €30 billion rescue package for Greece.
23 April: Greek Prime Minister George Papandreou asks for activation of aid package.
2 May: Greek prime minister agrees new terms with eurozone members and the IMF. Eurozone finance ministers agree Greece has met conditions for aid package.
7 May: Eurozone leaders meet to discuss Greece and agree to set up a €750bn eurozone stabilisation package with the IMF. õ 9 May: Elections in North Rhine-Westphalia; ruling CDU-FDP coalition loses majority.
10 May: Finance ministers agree stabilisation fund.
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