The happy partnership between Germany and France on the European debt crisis turned unmistakably sour this morning. On Thursday, France, Italy and Spain ganged up on German Chancellor Angela Merkel to oppose her austerity-centered approach but today Merkel is firing back, taking direct shots at France. The days of a peaceable euro zone alliance between the two economic powerhouses is on the rocks.
The trouble started Thursday when French President Francois Hollande and Italian Premier Mario Monti held bilateral talks on the euro crisis. The two agreed to pro-growth strategy in sharp contrast to Merkel's preferred medicine of budget cuts and debt reduction. "Growth is the first thing, the second is stability," said Hollande. Monti echoed Hollande's sentiment saying Europe's response "has not been enough to protect the euro from market turbulence." As the AP's Colleen Barry and Frances D'Emilio reported, "The two men also discussed launching eurobonds, jointly issued bonds that would spread debt risk that both support." The trouble is Germany vehemently opposes jointly-issued eurobonds and has stated that repeatedly.
Regardless, Hollande twisted the knife a little further. As Reuters' Pierre Briancon notes, Hollande publicly invited Merkel's opposition, the Social Democrats, for a meeting at the Elysée, a move that would infuriate any politician. He also enlisted Spain to bolster his negotiating power against Merkel. "He is clearly aiming at some kind of alliance with Italy’s Mario Monti, whom he is visiting on Thursday in Rome, and is on the same page as Spain’s Mariano Rajoy," he writes. "The aim is to get Germany to agree to what it has always refused: immediately launch reforms that would imply financial backing from Berlin." As Briancon notes, the confrontational moves mark a stark contrast from the "conciliatory mode" in which Hollande began his relationship with Merkel at the start of his presidency.