Angela Merkel, it was said, did not like Nicolas Sarkozy, but she was able to feign agreement with him from time to time. Apparently she cannot do this with Hollande. The two no longer even pretend to be discussing the same subjects. Hollande thinks he got a banking agreement in Brussels that will take effect before the end of the year. Merkel things there was a framework established for a future banking union and no agreement as to direct recapitalization of Spanish banks until all the details have been worked out. Hollande flatly rejected Merkel's call for a budgetary czar in Brussels and insists that Europe already has all the fiscal union it needs.
What can possibly alter this destructive cycle in the European discussion? Is it actually worse than before? Perhaps not. Open disagreement is at least informative, whereas veiled disputes merely enhanced the confusion. But I think we will soon see a market run on Spain.