Friday, July 13, 2007

What Really Happened in Brussels?

Jean Quatremer, writing in Libé, claims to have the real story of the Eurogroup meeting in Brussels. Although everyone put on a good face in public, he says, behind the scenes Sarko received a dressing-down from the finance ministers in such unvarnished terms that he allegedly told one of them, the German Peer Steinbrück, "I won't allow you to talk to me that way." So Sarko's brilliant success in Brussels was in fact, according to Quatremer, a mere self-serving publicity operation. Several French blogs have picked up this theme (e.g., here for references; for my earlier comment, see here).

Quatremer's revisionist reading is as one-sided as Sarkozy's representation, however. It would be more accurate to say, as diplomats are wont to do, that there was a "frank exchange of views." The Eurogroup let Sarko know that it expects him to hold to the 2010 deadline for deficit reduction. Sarko let the Eurogroup know that he is aware of their concern and hopes that his vaunted "structural reforms" (read: personnel cuts in the schools, finance ministry, and elsewhere) will go some way toward compensating for his tax cuts and that rapid economic growth will take care of the rest. But if these things don't happen, so be it. How many divisions has the Eurogroup? one can almost hear him saying.

It's absurd of Quatremer to pretend that Sarko was taken to the woodshed, just as it's absurd of Sarko to pretend that he's "saved" Europe or brought the central bankers around to his way of thinking about inflation and exchange rates. But none of the antagonists in this contest can do much to alter the behavior of the others. So the brave public face is just as apt a representation of the state of play as the private scowls.

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