Don’t judge Germany’s negotiation outcome yet

Germany’s aim in the negotiations on the reform of the governance structure of European Monetary Union and the Stability and Growth Pact (SGP) was threefold: First, the German government wanted a tightening of the budgetary rules of the SGP, preferably with tougher fines and automatic sanctions. Second, in order to make the no-bail-out-clause credible again, Berlin was pushing for a crisis resolution mechanism which – as an ultima ratio – contains the possibility of an orderly sovereign default. Third, Germany wanted to prevent the EU Commission or the partners to apply pressure on it to reduce its large current account surpluses.

ISPI: Commentary: Don’t judge Germany’s negotiation outcome yet [PDF] http://www.ispionline.it/sites/default/files/pubblicazioni/commentary_dullien_20.10.2010_0.pdf

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