German Chancellor Angela Merkel is backing away from the proposed EU bailout of Greece:
Despite a show of Franco-German unity on the crisis and the first statement from EU leaders pledging to safeguard the currency’s stability, hopes on the markets of a German-led rescue plan to shore up Greece’s critical public finances were dashed by Merkel, who repeatedly emphasised that Athens would need to put its own house in order and brushed aside all questions of financial support.
“Germany is stepping totally on the brakes on financial assistance,” said a senior EU diplomat. “On legal grounds, on constitutional grounds and on principle.” Another senior diplomat said of the Germans: “They’re not waving their chequebooks.”
Watch for the DOW to take another dive tomorrow.
And to show that some things never change:
Merkel and Sarkozy held a joint press conference after the summit to demonstrate Franco-German unity, but that masked fundamental differences over how to proceed.
“France and Germany cannot agree on anything,” said a Brussels official. “They are not always on the same page.”