Merkel under fire for EU budget “sellout” to France

German Chancellor Angela Merkel was pilloried by coalition allies and the media on Wednesday for an alleged sellout to French President Nicolas Sarkozy, dropping German demands for automatic enforcement of EU budget rules.
Caught off guard by the deal reached in the French town of Deauville on Monday, Merkel's centre-right allies said German taxpayers who bankrolled Greece's rescue package had been promised automatic sanctions on future debt sinners.
Instead, it will take a political decision by a qualified majority of euro zone governments to start disciplinary action against any state with an excessive deficit or debt level, and a majority of countries can still block any financial sanction.
Policymakers like European Central Bank executive board member Juergen Stark complained that the compromise on reforms to the European Union's stability pact fell far short of proposals by the bloc's executive branch.
"The German government has failed spectacularly in its aim of making the stability pact a new instrument for budget discipline," said the Financial Times Deutschland.
"Rarely has a government started so ambitiously with a central issue like the stability pact and ended up caving in so soon, so quickly and so thoroughly," said an FTD editorial.
Merkel's spokesman Steffen Seibert told reporters it was very positive to see Germany and France "pulling together" while cabinet ministers were all "on the same page" on the issue.
He said the Franco-German goal of changing the EU treaty in 2013 to suspend the voting rights of countries that breach budget rules was ambitious, adding: "If Germany had not got France on its side, we could have forgotten the whole thing."
"She had made a clear promise to German taxpayers that if Germany gave Greece billions of aid, the euro stability pact would be strengthened. Merkel has broken her promise," said Silvana Koch-Mehrin, an FDP vice-president of Merkel's liberal coalition partners.
"Renouncing automatic sanctions for debt sinners begs the question: what tools do we have to prevent further crises like the Greek debacle?" she asked, lamenting that over-indebted countries would basically "decide on their own punishments".
Members of Merkel's own conservative Christian Democratic Union were more cautious in their criticism, but CDU finance expert Leo Dautzenberg said while he welcomed the deal, "overall we would have liked the sanctions to go further".