A meeting between France and Germany over the Greek debt crisis has eased the panic that set in last week among political leaders and international markets. Last Friday in Berlin, French President Nicolas Sarkozy once again prevented his German counterpart, Angela Merkel, from withdrawing the help the European Union (EU) was about to offer the Greeks. The political wrestling match predicted by many did not take place: the two heads of state left each other all smiles.

The agreement reached adopts many of the French proposals. Greece will benefit from a new bailout. Banks will participate in the rescue but on a voluntary basis. And the European Central Bank's advice will be taken into account.

Once again, however, the process was confusing and overly complicated – thanks to Germany.

Our neighbors' coalition government and their system of power sharing, which differs a lot from ours, can partly explain this situation. Their concern about public spending is also legitimate. But disagreements among the German political leaders and their last minute reversals have been costly.

On Friday, Merkel told Sarkozy she was not entirely aware of the initiatives taken by her secretary of finance, Wolfgang Schäuble. This is even harder to believe knowing that on Saturday she took a tougher stand on the Greek issue, and gave the impression of backtracking.

Chancellor Merkel cannot keep blowing both hot and cold. She cannot keep defending one line to target her European partners, and another to appeal to her fellow citizens in Germany. Once again, Europe bought some time. But hard negotiations concerning the implementation of the plan are expected. Secretaries of finance of the Euro group began discussions on the subject Sunday, and meetings of the European Council, scheduled for this Thursday and Friday, might help settle the deal. Nevertheless, it is probable that EU countries will need even more time to finalize the agreement, meaning markets are likely to remain feverish.

Once again we can say, and righteously so, that the important thing is that Paris and Berlin manage to speak with one voice. But the two capitals are more than ever facing a terrible dilemma: either they run the risk of a generalized EU crisis, or take a new step toward European federalism. The second option, proposed by the current president of the European Central Bank, Jean-Claude Trichet, has long since been dismissed by the political leaders and by public opinion in both France and Germany. Both options are risky, but the second is certainly the more rational. Once again.

Read the original article in French

Photo - elysee.fr