Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
I always wish to be a fly on the wall in these meetings just to see how things chronologically played out, so this piece by Der Spiegel is quite fascinating to me. Read on if you want to see how Italy and Spain broke Germany; it appears Monti was the pivotal man last night.
Monti’s uprising began at 7:00 p.m. on Thursday evening. That was when European Council President Herman Van Rompuy wanted to conclude the summit’s first working session and announce the growth pact to the press. According to participants, Monti was furious and asked Van Rompuy where he was going. Had the president perhaps not understand correctly, Monti reportedly asked. The Italian prime minister said he could not leave the summit without concrete measures to fight the high interest rates on Italian government bonds. He would not agree to the growth pact until that issue had been clarified. Rajoy lent his support to Monti and said that he too could not yet approve the pact.
The threats apparently made an impact on the other delegates. Danish Prime Minister Helle Thorning-Schmidt asked pointedly whether the attendees were now all hostages. Van Rompuy remained seated. It was only after 10 p.m. that he made another attempt to appear before the press. Merkel urged him to announce an agreement on the growth pact. French President François Hollande, however, told him to tell “the truth.”
At 10:30 p.m. Van Rompuy appeared in the press room and announced an “interim status.” In principle there were no objections to the growth pact, he said, but two countries were not yet able to agree on it.
After midnight, when the blockade had still not been resolved, representatives of the 10 non-euro EU members headed back to their hotels. Leaders of the 17 euro-zone countries remained in their seats and began a decisive round of negotiations. At this point, members of the German delegation were still insisting they would not give up their hardline position.
A few hours later, however, Monti and Rajoy had the chancellor where they wanted her. She agreed that countries would in the future be able to receive funds from the ESM without having to submit to troika oversight. Instead, only the European Commission’s annual targets will have to be met. Monti said that Italy would not ask the ESM for help. For now, he only wanted to send a signal to the financial markets in order to take the pressure off Italy.
The session ended at 4:20 a.m. on Friday morning. Ten minutes later, Van Rompuy and European Commission President José Manuel Barroso announced the breakthrough at a press conference. At 5:00 a.m., Monti, the winner of the evening, appeared at the Council building’s exit. He gave a press conference on the way to the car — and announced that he will travel to the European Championship football final in Kiev on Sunday.
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