Messages in the Media - University of Toronto

EU; however, believe that each state should maintain a
degree of control. 14
- At the March 2011 Summit, despite fierce lobbying by
Merkel, the “Competitiveness Pact” was only partially
adopted and used by the Member States in a non-binding
letter of intent. 15
- After the Summit in March 2011, the Chancellor faced the
dilemma of choosing between the wishes of the Eurozone
states and the expectations of the German public. 16
- It was decided that the ESM would replace the EFSF, by
mid 2013. The ministers also increased the nominal
amount of the new crisis fund to €700 billion, for which
the German capital share is 27.1 percent. The German
guarantee for the ESM is 27.1 percent of €620 billion, or
about €168 billion. 17
European Financial Stability Facility
- It became apparent that there was a need for a new funding
package. The EU and Germany both agree that Greek
solvency would be calamitous The European share of the
new aid package is expected to take over the EFSF. The
total size of the new program is 60 to 70 billion euro. The
aid would come from the EU funded EFSF. The Germans
favour this because it would not require ratification in
their national parliament; however many EU countries
are opposed to this because of the forfeiture of power to
the EU. 18 19 The Greeks will have to privatize many of
their public assets in order to raise capital to pay back
loans as well as reduce public expenditure.
20 21
- Merkel and Sarkozy met in Berlin ahead of a second
summit on the Greek crisis to reach an agreement. While
Merkel wanted private creditors involved in the EFSF,
Sarkozy did not as he was worried that it could damage
French banks. 22
- At a meeting in Paris, Merkel and Sarkozy proposed the
creation of a European economic government to EU President
Van Rompuy; this proposal advocated that Eurozone
countries meet twice a year to vote on economic policy
issues. According to Merkel and Sarkozy, there was a
clear need for financial and economic policy integration
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