The haggling is in full swing at this hour -- North against South, rich countries against poor ones, German Chancellor Angela Merkel against French President François Hollande. They're stuck on a word, one that would normally have a beautiful, positive sound: common. The word "common" is dividing Europe. This is what it has come to in this night of hard-fought negotiations.
For more than six hours now, the leaders of the European Union have been meeting in Brussels to discuss the future. They are here to agree on a document, and according to item 12 of that paper, there is to be a "common backstop" for the new banking union, a sort of shared resolution fund for worst-case scenarios.
Germany wants the word "common" deleted. So do Sweden, Finland, Denmark and the Netherlands. France wants to keep the word in the document, as do Italy, Spain and Portugal. The northern countries are afraid that they'll be asked to pay even more than they already do, while the south is hoping for more shared responsibility in the crisis. The dispute continues for three-quarters of an hour. The northern countries win the fight and the word "common" is stricken from the closing statement of the most recent EU summit.
This happened on Dec. 13 and 14, during a meeting of the European Council, the powerful EU body consisting of all 27 heads of state and government. They meet behind closed doors, and not even their closest staff members are allowed to attend. During these discussions, secrecy is normally paramount. But as of the last one, that no longer applies.
Months ago, SPIEGEL began opening the doors to this summit. A team of six reporters traveled to European capitals to find sources for a reconstruction of the December meeting. As a result, they were able to obtain reports on the negotiations, during and after the summit, from almost a dozen sources. The reports make it possible to accurately recount the events that unfolded.
The participants expressed satisfaction after the meeting. Some, including the chancellor, said they had made some progress. But is that true? Ahead of this summit, in particular, expectations had been high. It was supposed to be about the big picture, the future of the economic and monetary union -- and not just new aid for Greece. European Council President Herman Van Rompuy had been tasked with submitting proposals on how to strengthen the union.
Van Rompuy had Merkel's backing. Speaking to the European Parliament in November, she had voiced her strong support for a fundamental reform. "A renewed economic and monetary union needs more common fiscal policy," the chancellor said, as well as "a common economic policy." She had used the word "common" twice.
For some time, Merkel has believed that the founding fathers of the euro, former German Chancellor Helmut Kohl and former French President François Mitterrand, made a mistake when they neglected to give the currency a political structure. For Merkel, this is one of the reasons for the current crisis. She also believes that it's up to her generation to correct the mistake. She wants the EU member states to give up more sovereignty so that policymakers in Brussels can quickly and effectively decide on a common fiscal and economic policy. To achieve this, Merkel even talked about amending the European treaties.
The December summit was seen as an opportunity for Europe to take a big and decisive step in this direction. But it failed on that count, producing an outcome that was tenuous at best.
How could this happen? The days leading up to the summit and the meeting itself show how Europe functions -- or rather, doesn't -- at a key juncture. They show how a big idea can be ruined in ritualized routine. Despite the talk, few leaders are truly advocating further European integration these days.
Olso, Monday, Dec. 10, 1:20 p.m.
The applause begins to build, growing louder and louder. Merkel and Hollande, who are sitting in the front row, turn around, smiling and whispering to each other. Polish Prime Minister Donald Tusk tells them to finally stand up, and when they actually do, Hollande takes Merkel's hand and raises it above their heads. And there they are, standing hand in hand, their arms outstretched, and smiling.
It's an important and moving moment. The European Union is being awarded the Nobel Peace Prize on this day, and the chairman of the Nobel Committee has just extoled Franco-German reconciliation, which explains why the two leaders are now standing there, basking in applause.
They're sitting at lunch an hour later, 20 EU leaders, Van Rompuy, the Council's president, European Commission President José Manuel Barroso -- the European administration, in other words -- and European Parliament President Martin Schulz. They are in very good spirits and are talking about integration and a deepening of relations. In fact, Schulz is still doing most of the talking.
Martin Schulz, 57, a Social Democrat from Würselen near Aachen in western Germany, is known for his strong personality, which he expresses in lengthy tirades. When he walks, he is as bowlegged as the professional soccer player he almost became, and he is a talented actor. Merkel likes to say to him: Why don't you do Sarkozy for us? Then Schulz does a perfect imitation of former French President Nicolas Sarkozy, looking agitated and hectic, and speaking in a deep voice, to Merkel's great amusement. Another one of Schulz's strengths is that he never stops fighting for a united Europe .
In Oslo, at lunch, he talks about the upcoming elections in Italy and the threat posed by former Prime Minister Silvio Berlusconi, who has announced that he wants to run again. Schulz says that while only the Italian people can decide whether Berlusconi becomes their prime minister again, his election could have serious implications for all Europeans, and that this issue underscores the poor design of the EU. No one contradicts him, and many agree. Integration must continue, Merkel adds. Bathed in the halo of the Nobel prize, everyone feels very European. At this banquet, at any rate, they can give speeches that cost them nothing.
Brussels, Tuesday, Dec. 11, 2 p.m.: The ministers for European Affairs are holding a luncheon in preparation of the summit.
Michael Link, a minister of state in the German Foreign Ministry, represents Germany. The documents that will serve as the basis of the summit are the main topic of discussion.
When it comes to Europe's future, the egos of the heads of the most important EU institutions play an important role. Council President Van Rompuy was actually tasked with presenting a paper to be considered at the summit, but Commission President Barroso preempted him. Thirteen days before the meeting, he presented the public with a 51-page document titled "Blueprint For a Deep and Genuine Economic and Monetary Union," in which Barroso describes his proposals for the reorganization of the EU. "In this type of monetary union," he writes, "all major economic and fiscal policy choices of its member states should be subject to deeper coordination, endorsement and surveillance at the European level." Barroso proposes establishing an economic government in three phases.
Van Rompuy followed suit five days later. His paper consisted of only 15 pages, and the title didn't sound as ambitious: "Towards a Genuine Economic and Monetary Union." Although Van Rompuy had borrowed Barroso's three-step model, revolutionary proposals like the establishment of a debt redemption fund and a European Finance Ministry were eliminated. There was, however, still talk of an independent "fiscal capacity" for the euro zone, the coordination of labor market and tax policy, and of "common decision-making" on national budgets.
Berlin Dismisses Reform Plans as 'Science Fiction'
But by a week later, on the eve of the Brussels summit, there was also little left of Van Rompuy's proposal. The draft of the document that the EU leaders are supposed to adopt, the so-called conclusions, merely mentions that the member states will discuss their reforms when deemed "appropriate." A common budget is no longer mentioned, and the document nebulously refers to an "integrated financial framework." The idea of binding reform agreements among the member states and the EU institutions has also disappeared into the fine print. The document states that "individual agreements of a contractual nature with EU institutions could enhance ownership and effectiveness." Now Van Rompuy has also eliminated the three-step plan.
In the meantime, he had spoken with many European leaders by phone, and he quickly found out that there is no strong support for deeper integration in Europe.
"Most of it is science fiction," German State Secretary Link says dismissively at the luncheon in Brussels, referring to the first Van Rompuy document.
'A Second-Class Monetary Union'
Berlin, Wednesday, Dec. 12, 11 a.m. The Federal Press Conference Building. Nikolaus Meyer-Landrut is briefing journalists on the German government's position ahead of the summit.
Meyer-Landrut, 52, heads the European Division of the German Chancellery. Despite his calm demeanor, he can be harsh, occasionally even to the chancellor. When he feels that something she has said isn't quite right, he sometimes rains on her parade, as visitors have noted with surprise. A muscle in his jaw twitches when he becomes upset or is under pressure. He is a relative of the German singer Lena Meyer-Landrut, who won the 2010 Eurovision Song Contest for Germany .
"To be honest, I'm surprised that everyone wants to talk about how and for what money can be spent," Meyer-Landrut tells the journalists. He's referring to the "anti-shock mechanism," a fund intended to reduce the impact of economic crises in individual countries. The leaders of the Southern European countries, in particular, want to discuss it in Brussels. It's based on an idea of Merkel's that she no longer fully embraces. Referring to the proposed fund, Meyer-Landrut says: "Let me say this in a very amicable fashion. I believe the idea of counterbalancing through the backdoor what we are currently establishing in the way of fiscal discipline in the member states by establishing large European funds will not meet with the approval of the German government."
Merkel is mainly interested in discussing competitiveness in Brussels. It's the Germans' strength, and it's an area in which Berlin can make demands of others without having to spend any money. Meyer-Landrut talks a lot about competitiveness. His talk is stern and distant. The topic of solidarity isn't his, meaning it isn't Merkel's, because what Meyer-Landrut is saying here is what she wants him to say. Neither one thinks much of the papers presented by Van Rompuy and Barroso, as Meyer-Landrut notes when he says: "In terms of conceptual depth and intellectual development, they are not as advanced as we would like."
Merkel's strategy for Brussels is to delay things. The Germans want to see a roadmap approved, but nothing more. At the end of the press conference, Meyer-Landrut says: "Our willingness to embark on reforms hasn't declined." It's surprising that no one laughs.
A week earlier, Meyer-Landrut had invited two colleagues to a friend's house on the Wannsee, a lake in Berlin: Philippe Léglise-Costa, the European policy advisor to French President Hollande, and Piotr Serafin, the state secretary for European affairs in the government of Polish Prime Minister Donald Tusk. It was a bitterly cold -5 degrees Celsius (23 degrees Fahrenheit) night, but everyone enjoyed the magnificent view of the lake in winter. During their dinner, the three men intended to talk about what they believed Europe would look like in five or 10 years. Afterwards, Serafin was amazed over the extent to which the two other men agreed on an important point: Neither one wants key competencies, like fiscal and labor market policy, to be turned over to Brussels.
Brussels, the bar at the Sofitel, shortly after 7 p.m. Jean-Claude Juncker walks in and orders a gin and tonic.
Juncker, 58, a Christian Democrat, has been the prime minister of Luxembourg for 18 years, which also means that he has attended the meetings of the European Council for 18 years. He's fond of saying: "At my age, nothing surprises me anymore." His European counterparts sometimes find him annoying, because he has a tendency to be preachy or make a show of looking bored. Without Juncker , Luxembourg would be a very small country in Europe . But with him at the helm, it almost comes across as a medium-sized land. Referring to Germany 's European policy, Juncker once said slyly: "(Former Chancellor) Helmut Kohl was good, and Mrs. Merkel isn't bad -- although in this case 'good' and 'not bad' mean the same thing."
He takes a sip of his gin and tonic, but he doesn't look pleased. He has just read the last draft of the conclusions that Van Rompuy had sent to the European leaders. It has been a long time since he's seen a document this feeble.
How does he view the role the Germans played in the process that led to this weak document? "We've gotten used to the fact that the German position develops in an evolutionary way," he says astutely.
Brussels, Thursday, Dec. 13. Lex Building
After meeting for 14 hours, the finance ministers agree on a European banking supervisory authority under the umbrella of the European Central Bank (ECB). The Germans were long skeptical, but they eventually bowed to pressure from other member states. Once the central banking supervisory authority is up and running, by the beginning of 2014, European rescue funds will be able to bail out banks directly.
The Warsaw Airport, military section, 10:40 a.m.
It's very cold outside, as two limousines rush onto the tarmac. Prime Minister Donald Tusk is 15 minutes late. A staff member schleps suit carriers and a large travel bag up the gangway. "Even the prime minister needs fresh underwear sometimes," a Polish journalist remarks.
Donald Tusk, 55, a liberal-conservative, is a slim, modest intellectual with a trait rarely seen in politicians: a dislike of acrimonious debates. Tusk and his government are nice to everyone, so much so that their style is polemically referred to as a "love policy." Merkel is the object of a large share of this affection. Tusk has closely aligned Poland with Germany , especially on European issues. In an interview with SPIEGEL ONLINE two years ago, Tusk admitted: "I'm incapable of getting angry with Angela Merkel."
Tusk greets the flight crew with a brief nod and sits down next to the window on the right front side of the aircraft. The plane is teeming with his staff members, as they constantly squeeze past the flight attendant, their phones pressed to their ears, as she tries to give her safety presentation in the aisle. Finally, she becomes exasperated and drops the oxygen mask and seat belt she has been holding. Telephones are still ringing when the plane reaches the runway.
State Secretary for European Affairs Serafin is sitting across from Tusk. He is satisfied with the decisions reached by the finance ministers the night before. "The draft takes all of our concerns into account," he says. The Poles are always afraid of being shut out from the rest of Europe. "Poland wants to be involved in the structuring of the euro zone without actually being a member," says Serafin. This places the large non-euro country in a special position.
Brussels, VIP entrance to the Justus Lipsius Building, where the European Council meets, 4:00 p.m.
The European leaders are arriving, starting with Merkel, who says into the microphones that "a great deal" has been achieved this year. Hollande arrives soon afterwards, and he too says that much has been accomplished.
It's dusk as the large limousines carrying the European leaders arrive behind the flickering blue lights of police cars. Ninety percent of the limousines are made in Germany -- mostly Audis and BMWs. The arrival illustrates one subject of the summit: the economic imbalance in Europe.
Tusk, together with his entourage, hurries into the office of the Polish delegation on the seventh floor, where he disappears into a room filled with elegant black furniture. Computers are booted up. The suite of rooms exudes bureaucratic matter-of-factness. There are no decorations or crucifixes, except for a plastic evergreen branch taped to the sign on the door.
Hollande has already had a brief conversation with Italian Prime Minister Mario Monti and his Spanish counterpart Mariano Rajoy. He walks over to the office of the German delegation to pay Merkel a visit.
Merkel, 58, a Christian Democrat, the chancellor of Germany for the last seven years, and Hollande, a Socialist and president of France for more than half a year now who is the same age as his Berlin counterpart, rarely agree. Merkel was outraged when Hollande said in October that the German position on Europe is already being influenced by the upcoming parliamentary election in the fall of 2013. How could he! It annoys Hollande that Merkel paints herself as a great European, and yet is only interested in protecting Germany's money. She doesn't think he's amusing enough to ask Martin Schulz to do an impersonation of him either. When she says competitiveness, he says solidarity. The pair don't make for a strong Franco-German axis.
They speak to each other for half an hour. Merkel says amiably that she won't support a large European "shock absorption capacity." After the meeting, aides say that the tone of their discussion was positive.
The round table room in the council building, fifth floor, about 5:00 p.m.
The summit participants are gradually arriving. Schulz is carrying a blue notebook and Hollande a yellow one, but Merkel isn't carrying one. She greets a few of her counterparts with kisses on the cheek, and then she takes her seat between Portuguese Prime Minister Pedro Passos Coelho and Finnish Prime Minister Jyrki Katainen. Her iPad is on the desk in front of her.
The meeting begins with Schulz giving a small speech. "The creed of the European Union is not reflected in visions of the future, but in concrete actions," he says. "For this reason, you should now take advantage of this opportunity -- and that is the choice you now confront -- to finally achieve institutional clarity and strengthen the European democracy."
Barroso takes the floor and agrees with everything Schulz has said. Merkel launches into a conversation with Coelho, who is sitting to her left, a chat she appears to find more interesting than what Barroso is saying. She shows no interest whatsoever in the speaker who follows Barroso, Cypriot President Dimitris Christofias. He's familiar with her reaction. When he speaks, the murmur of conversation in the room becomes more audible. Cyprus is a small, distant island in the Mediterranean.
Juncker is arguing with Schulz over whether it makes more sense to present the national budgets to the Commission or the individual parliaments first. The argument, in German, becomes a little heated.
Schulz's presentation lasts more than an hour. The European leaders assemble for a harmonious-looking group photo with their guest. Then it's time for Schulz to leave, and the doors are closed for the first working session.
Van Rompuy begins the meeting with the words: "This is supposed to be an evening of the economic and monetary union. I hope it won't be a night of the economic and monetary union."
Van Rompuy, 65, president of the European Council, is nicknamed "the Sphinx" in his native Belgium , because he rarely shows emotion. He attended a Jesuit school and likes to write haikus, short Japanese poems that follow a strict format. He is often on the phone with Merkel. She once said to him: "Well, Herman, then I'll carry it out just the way you describe." She didn't do it, of course. What she meant to say was that Van Rompuy has no authority over her. In fact, it's more or less the other way around, with Merkel telling Van Rompuy what flies in Europe and what doesn't. They spoke on the phone with each many times before the summit. Van Rompuy's most recent haiku reads: "The night has fallen / The bare branches can be seen / Even more lonely."
Van Rompuy has a personal interest in bringing the summit to a speedy conclusion. His son is getting married on Friday evening, and he hopes to be reasonably well rested for the wedding. The European leaders discuss the documents in front of them: Barroso's blueprint, Van Rompuy's proposal and the conclusions that were written in advance for the summit.
The South wants more solidarity, while the North demands more discipline.
Van Rompuy says: "The euro is a first-class world currency, but we only have a second-class monetary union." He then announces a scheduling change. The date of the May summit is being pushed back from the 30th to the 22nd.
Now the discussion begins. Actually, a real discussion almost never materializes, because the participants speak in accordance with the order specified on the agenda. As a result, hardly anyone ever refers to the remarks made by the preceding speaker; instead, each participant says what he or she has already decided to say. Each speaker has four minutes.
The fourth speaker after Van Rompuy is Rajoy. He says that the idea of a fiscal capacity for the euro zone is a good one, but that it will require additional money, causing Merkel to prick up her ears.
The Council Live
She is the sixth speaker after Van Rompuy. She notes that competitiveness needs to be improved. Then she addresses the issue of the fiscal capacity. If it's to be used to offset external shocks, she says, the fund will require €80 to 100 billion. "Where is this money supposed to come from?" the chancellor asks. "Can someone explain that to me? Should the EU be given the right to collect taxes directly?"
At about 8:15 p.m., Hollande glances at his mobile phone and sees that he has a text message from Schulz. He has just learned that the European summit has been rescheduled for May 22. Germany's center-left Social Democratic Party (SPD) plans to celebrate its 150th birthday on the 23rd, and Hollande is expected to be the keynote speaker. This won't work, Schulz writes. I'll talk to Merkel, Hollande replies.
The chancellor reacts obstinately. The summit was only supposed to last for a day, not the usual two days, she says, so that Hollande can give his speech at the SPD event on the 23rd. Hollande writes a text message to Schulz, and he replies: There is going to be a meeting of the party leaders on the 22nd, including Social Democrats attending the summit. I'll talk to Van Rompuy, Hollande writes.
What's the topic of the summit again? The SPD or Europe's future?
The attendees are almost all multi-taskers. They spend a lot of time on their mobile phones and iPads. Merkel reads news agency reports, while British Prime Minister David Cameron passes the time with electronic card games on his iPad.
Now Slovak Prime Minister Robert Fico makes an odd remark. He says that he encountered a group of students today who didn't know what the European Council does. "I gave them the draft of the conclusions, but they didn't understand any of it." Truly surprising.
In addition to the EU leaders and the heads of state and government, a few senior European bureaucrats are attending the summit. The only connection to the outside world are three minute takers with the European Council office, also known as "note takers." They write down what the politicians say.
Every 20 minutes, a note taker leaves the room and walks over to room 50.2, where there are diplomats from each EU member state who are known as Anticis. The name is derived from Italian Paolo Massimo Antici, who founded the group of officials in 1975. The note taker reads his minutes out loud to the diplomats from the member states, usually in French but sometimes in English. The Anticis from the 27 EU countries write down what the note taker is saying and then send their reports to the delegation offices. This is how Meyer-Landrut learns what Merkel has said in the meeting, although what he reads sometimes differs considerably from what his Polish or Spanish counterpart reads, because each Antici hears something different and translates what he or she hears in a different way. Perhaps this is one of the reasons for the frequent misunderstandings.
An Antici's job is stressful, because the officials' duties also include attending to the needs of their national leaders at the round table. When Merkel needs a document or a glass of wine, she presses a button on the table in front of her. This illuminates a small light on a display panel in the room next door, and the German Antici hurries over to the chancellor.
The first reports from the Antici are now arriving in the delegation offices. The Polish reports appear under the heading "Rada na zywo," or "The Council Live." The Poles read the first reports calmly.
Poland's EU ambassador, Marek Prawda, is sitting in the Polish delegation's office. He is a man who talks very quietly and sometimes spends an irritatingly long time gathering his thoughts before answering. Prawda's explanation for Merkel's stepping on the brakes and seeking to postpone reform proposals like the anti-shock fund goes something like this: "Although it was the chancellor who proposed this, she was shocked to see how the southern countries pounced on it. After all, it's a question of money from Brussels in return for structural reforms. The Germans will now insert moderating language into the document, language that enables them to play for time." Poland itself doesn't want to stoke up the pace of reform, because the country is worried about being left behind. So far, nothing has happened at the summit that could jeopardize its position in Europe.
A Northern Insurrection against the South
Now Finnish Prime Minister Katainen is speaking in the round table room, marking the beginning of something one might characterize as the North's insurrection against the South. The countries in the North are doing relatively well, and they pay more into the EU than they receive in return. Katainen says: "There are some ideas that go too far, like the creation of a fiscal capacity for the euro zone. We have to get rid of weaknesses in the monetary union, but we mustn't go too far." His Swedish counterpart, Fredrik Reinfeldt, expresses himself more directly.
Reinfeldt, 47, a conservative, has been Sweden 's prime minister for six years. He is a dyed-in-the-wool Swede who likes to watch ice hockey and listen to Abba. His country has openly contravened EU rules for years, because each EU member is required to join the monetary union as soon as it has satisfied the economic requirements (exceptions apply, but only for Great Britain and Denmark ). However, the Swedes voted against the rule in a referendum, and Reinfeldt has now become an even more aggressive skeptic when it comes to Europe than British Prime Minister Cameron. Referring to Merkel, he says: "We're wired very similarly."
At the summit meeting, he initially criticizes the Council's operating methods. It's unacceptable, he says, that the Council is constantly making decisions and agreeing on the wording of resolutions, only to postpone the ironing out of details to a later date. This is a questionable practice that doesn't inspire confidence, he notes.
Reinfeldt believes that there are plenty of instruments to combat the crisis, but that they are not being implemented correctly. He notes that it isn't necessary "to constantly approve new instruments." He also says that the euro isn't the currency of the European Union, and he cites a survey in which only nine percent of Swedes supported their country joining the euro zone.
And then he makes his position perfectly clear: "My citizens are opposed to transnational responsibility when it comes to helping a bank that's gotten itself into trouble in another country." And Reinfeldt also wants nothing to do with any anti-shock fund.
Danish Prime Minister Helle Thorning Schmidt adds: "We should concentrate on the measures we have already approved. We mustn't let ourselves be distracted by new proposals." Referring to the anti-shock fund, Dutch Prime Minister Mark Rutte, 45, says: "I am vehemently opposed to it."
In this situation, Barroso proves to be pretty much the last European.
Portuguese politician Barroso, 56, president of the European Commission since 2004, is constantly worried about getting the short end of the stick. Since Van Rompuy became the first full-time president of the European Council, thus giving him some serious competition, Barroso has been struggling even more for attention. Before the presentation of the Nobel Peace Prize, Barroso and Van Rompuy had an argument over who should represent the EU at the awards ceremony. In the end, the two men shared the acceptance speech, providing a perfect illustration of the discord among European institutions. Barroso is seen as Merkel's creation, because she once supported his candidacy. Now she sometimes finds him alarmingly pro-European.
Barroso, responding to Reinfeldt, says that under Article 3 of the EU Treaty, the euro is the currency of the European Union, and he calls for a credible political structure for the currency. No one applauds.
There is a break at about 9 p.m., and wine is served in the Polish delegation's office. Suddenly Tusk appears in the doorway and says, with feigned outrage: "Here you people are celebrating while I have to work!"
The horse-trading begins over dinner.
Monti Has Had Enough
The dining room, 9:30 p.m.
Dinner is served. Berlusconi is there, but only in spirit. He donated the large table in the dining room. White wine from Cyprus, not exactly a premium beverage, is served with the meal. According to the Daily Telegraph, the 20-year-old red wine served at the last summit was worth almost €150 a bottle. In actuality, it cost the European Council administration about €12 a bottle, but this time the officials opted for a truly inexpensive wine, so as not to create the impression that European leaders are being too extravagant in the midst of a crisis.
The rules are not as strict during dinner as they are during the working session, so that debates are more likely to materialize. No one is keeping any minutes, and Anticis are not allowed inside. The European leaders are now discussing the conclusions.
Hollande already has a problem with the introduction, because it doesn't mention the social dimension. He gets it, but in return Merkel wants the word "competitiveness" added to the introduction. The leaders agree, and the first horse trade is out of the way.
Merkel has another objection to the introduction. She doesn't like the use of the term "shock absorption capacity." She has come to Brussels determined to eliminate the term, and she is unwilling to sign a document that includes it. She gets her way.
During the dinner, no Anticis are present and there is considerable noise in the room. Participants are constantly getting up to consult with their European experts outside. Meyer-Landrut and his counterparts are outside the room, waiting for instructions from their bosses, so that they can continue their negotiations.
Merkel voices another objection. The draft states that the Commission will seek ways to factor out public investments from the deficit criteria. Each country is only permitted to increase its national debt by three percent of its annual gross domestic product. Factoring out investments will enable countries to borrow more, thereby watering down the 3-percent rule.
"I have a problem with that," says Merkel. "Angela is right," says Dutch Prime Minister Rutte. Katainen proposes deleting the sentence. Once again, the North has closed ranks against the more debt-ridden South.
But now Monti has had enough. "It wasn't Italy that watered down the Stability Pact," he says.
Monti, 69, nonpartisan, has achieved the feat of turning a nation that felt like former Prime Minister Silvio Berlusconi's bathtub back into a real country. He is Berlusconi's polar opposite. He's proof that the clichéd notion that objectiveness and reliability are predominately Nordic traits often doesn't apply. Under Monti , Italy is in better shape and is being taken seriously again by other countries. His demands are sometimes too forceful for Merkel's taste, although he prefers to characterize his approach as "a very energetic way of working together." Nevertheless, Monti is still preferable to Merkel over Berlusconi, who made disparaging remarks last year about her derrière.
Monti takes a potshot at Germany, noting that it was unable to comply with the limit on new borrowing under former Chancellor Gerhard Schröder. Hollande comes to Monti's defense, noting how important public investment is for growth and job creation.
Cypriot President Christofias interrupts the debate, saying that Cyprus and Greece should be allowed to factor out their military spending, because of the threat from Turkey. This time he has gained the attention of a few more people, who are now shaking their heads in disbelief. Those Cypriots.
The North more or less gets its way. "We modified the sentence until it was acceptable to us," Finnish Prime Minister Katainen says after the meeting.
The office of the Polish delegation, 10:10 p.m.
Suddenly a commotion erupts. Part of a sentence has been omitted from item 13 of the conclusions. The item relates to the rules of procedure for meetings on the fiscal pact. The missing words are: "fully respecting Article 12.3 TSCG." The letters TSCG (Treaty on Stability, Coordination and Governance) refer to the fiscal pact.
What happened to the missing text? Tomasz Husak, 35, the political director for European issues, who holds a doctorate in economics and another one in political science, is very focused. First he and his team comb through the document to see if the text may have been moved somewhere else. But it hasn't been. Together with Ambassador Prawda, they sit down at the computer and write an analysis. Poland is concerned that without this qualifying text, the euro countries will decide on the fiscal pact alone, that is, without Poland.
The advisors write a memo to Tusk, asking him to say: "A year ago, we spent a lot of time establishing the rules for the participation of non-euro countries. The role of the countries outside the euro zone that approved the fiscal pact must be defined in the establishment of the 'rules of procedure,' because they also determine the character of rights and obligations."
State Secretary for European Affairs Serafin takes the memo to Tusk while political director Husak meets with Merkel advisor Meyer-Landrut. Another official informs Van Rompuy about the Polish demand. "We want to be a transparent delegation. It's no use catching the others off-guard," says Husak.
Then the waiting continues. Husak and his coworkers hang around.
In the meantime, the entrée has been served in the dining room: pork loin with pureed pumpkin. The dessert is chocolate with orange peels.
After a long discussion, the word "common" is dropped from item 11, and item 12 also triggers a heated argument. Hollande insists on a "solidarity mechanism," which is just another name for an anti-shock mechanism. That's all very well, says Merkel, "but where is the money supposed to come from?" Rutte, the Dutch prime minister, agrees.
In the end, Hollande convinces the others that item 12b concerns a "social dimension of the EMU" (Economic and Monetary Union), and that item 12d describes a "solidarity mechanism," that is, a watered down version of an anti-shock fund for exceptional cases, to promote "competitiveness" (at Germany's request) and "growth" (at France's request). But Merkel expects the fund to translate into no more than €20 billion in spending, which means it'll have saved €80 billion as compared with what the Southern countries envisioned.
The meeting is interrupted at midnight to celebrate Helle Thorning-Schmidt's birthday. Waiters bring a chocolate cake into the room, and a few of them sing "Happy Birthday." Only about half the participants sing along, mostly off-key.
The office of the Polish delegation, 12:30 a.m.
"It's over now," one person writes in a text message, and a few people start putting their coats on. But as it turns out, it was a false alarm.
The European leaders have indeed discussed everything on the agenda, and Van Rompuy wants to have the final text printed out for all the participants. But then Merkel intervenes, saying that she wants the paragraph that was just amended read out loud one more time. Apparently she wants to make sure that no one has made off with the term "competitiveness." Van Rompuy does as he is told.
He interrupts the meeting for 20 minutes so that the conclusions can be printed out, and then he reads the changes in English, sentence by sentence. Merkel is satisfied. The word "competitiveness" is there, in all the right places.
Serafin and Prawda walk into the office of the Polish delegation at 2 a.m. to announce that the meeting is over. They're pleased, because the text they had been concerned about is back in the conclusions, meaning that Poland now has a say once again. Husak and a colleague give each other high fives.
No one offers any surprises, and no one fights for any bold reforms.
Waiting for the elevator on the way to her press conference, Merkel says: "Do I have to manage the Socialists' schedule now? After all, I'm not a Social Democrat. I'm a Christian Democrat." She was forced to deal with the colliding dates for the May summit and the SPD anniversary throughout the entire evening.
Hollande steps into the French briefing room for his press conference at 1:59 a.m. He had his aides apply some makeup in the delegation room, but he still looks pale and isn't smiling as much as usual. He steps onto the stage and stands at the lectern, which his staff has brought from Paris in a minibus. He says: "Okay, I congratulate you once again on your patience, your courage and your endurance, which -- combined with ours -- has made it possible to achieve significant progress for Europe in the last six months." Hollande says that he is satisfied with the summit and mentions the solidarity mechanism.
Merkel enters the German press briefing room at 2:05 a.m. She says: "Good evening, or good morning, as you wish." Then she stands behind the lectern at the front of the stage. She looks pale, her eyes are narrow and her hairdo is no longer as voluminous as usual. These nights are strenuous. But she is satisfied nonetheless. Her most important message for the German public, she says, is that changes "cannot be made at the taxpayers' expense." All she has to say about the EU's enthusiasm for reform is this: "We didn't talk about treaty amendments."
The much-touted summit ends with the conclusion that the individual countries are to negotiate contracts with the EU concerning reforms. It could also produce a tiny anti-shock fund, and there is a statement on fighting youth unemployment. Of course, competitiveness is an important goal. Everything remains vague. Somehow the task of rebuilding the EU is supposed to continue next summer, just when Germany is in the midst of its election campaign.
Europe Has Gotten Stuck in the Mud
Friday, Dec. 14, 10 a.m., the round table
The European leaders are meeting once again. Today's topics are Syria and defense policy. There will be no further changes to the conclusions on the monetary union.
British Prime Minister Cameron makes some interesting remarks. He says that there are too many redundant regulations in the EU, and he wants to see some of them suspended. His comments are also incorporated into the closing document.
Juncker says that he reviewed his press kit that morning, specifically the reports on reaching an agreement on the banking union. In one newspaper, he says, he read that Germany had prevailed, while other papers claimed that France was the winner. Speaking French, for a change, he says: "I've pretty much had enough. Eighty percent are describing the national positions. We can't go on this way."
After the summit, Juncker gets into the back seat of his BMW 7 Series, and his diplomatic advisor, Yuriko Backes, sits down next to him. Two police cars escort the limousine through Brussels rush-hour traffic. It's raining heavily, and the windshield wipers can hardly keep up. "Too bad it isn't snowing," says Juncker. After another year of countless crisis meetings, he's looking forward to a few quiet days around Christmas.
The landscape becomes hillier as the car heads southeast toward the Ardennes. The Belgian police escort takes its leave with a short burst of sirens, and then the limousine, with its Luxembourg license plate, continues along the highway alone. "The biggest contribution to the success of the summit," says Juncker, "wasn't made by the heads of state and government, but by the finance ministers ahead of the meeting." If they hadn't reached an agreement on the banking union and resolved the Greek problem, he says, "this summit would have gone down in history as a very unsuccessful meeting."
What happened to the enthusiasm for reform? Why is Merkel suddenly stepping on the brakes? Juncker lights a cigarette and takes a long drag. Largely, he says, it has to do with the growing influence of the national parliaments. "Since the Greek crisis, the members of parliament are no longer kowtowing to the heads of government. They want to know what taxpayers are being asked to pay for." He has nothing against the parliaments getting involved, says Juncker, but points out that it will become difficult when they start making preliminary determinations. "If all the parliaments do this, we'll hardly have any room to negotiate at the summits."
There is also a growing reluctance in European capitals to transfer additional rights of sovereignty to EU institutions, says Juncker. In many places, he adds, there has been a decline in awareness that the EU needs to be reformed. "Now that we are able to achieve short-term successes on the issue of the banking union and Greece, contrary to expectations, long-term reform is losing momentum."
The advisor's phone rings, indicating that she has received an agency report. Backes reads the message to her boss: "Juncker not satisfied with EU summit outcome." Juncker nods. He is indeed satisfied, because his message has been heard.
Besides, it's almost Christmas. "I like to sing," says Jean-Claude Juncker, as he breaks into the first few lines of a German Christmas carol, "Alle Jahre wieder" (Every Year Again).
A Growing Emphasis on National Interests
His BMW is speeding through a Europe that has gotten stuck in the mud. The summit has made that abundantly clear. The main problem is a growing emphasis on national interests. Almost all of the Europeans are focusing exclusively on their own interests, from the Poles to the Germans to the French. Some are determined not to lose their connection to Europe, others want to pay as little as possible and there are those who want to get as much as possible. Together, they represent three Europes: the East, the North and the South. The bridges among the three are narrow and weak.
The reports on the summit provide a sense of the torpor and ritualization. The South makes proposals, as it has always done, and the North dismisses those proposals, as it has always done -- and vice-versa. No one offers any surprises, no one goes the extra mile, and no one fights for bold reforms.
They all go through the routine motions of unwinding their national programs, as if there were no euro crisis bellowing at their doors. There is a huge difference between the public rhetoric and the behavior during negotiations, especially with the German chancellor. In public, she stresses common interests, but none of it remains once she is behind closed doors. She seems pedantic and mercantile. This doesn't mean that the Germans should always be the ones footing the bill. But a policy of trying to avoid payment at all costs isn't enough.
The summit also shows that Chancellor Merkel isn't leading, even though she ought to be. All of the participants look to her, make reference to her and wait for her. But Merkel does not make use of this position. She doesn't speak as harshly as her Swedish counterpart Reinfeldt or her Dutch colleague Rutte, and yet she is one of them. She is not someone who promotes the common cause, even though she ought to be, as the chancellor of Europe's largest and richest country.
Instead, she both accepts and is responsible for the fact that Europe currently has no vision. The December summit was historic, in the sense that it stifled Barroso's and Van Rompuy's attempt to build a political union. Both men returned home without having achieved their goals.
Monday, Dec. 17. Berlin, the headquarters of Merkel's Christian Democratic Union party, a meeting of the CDU steering committee, 10 a.m.
Merkel reports on the summit in Brussels. She is under the impression, she says, that Hollande is trying to obstruct everything she proposes between now and the German parliamentary election. Hollande currently has more allies than she does, she says, which is why cooperation isn't quite working yet. But she's doing her best to gather more allies for Germany, she adds.
It sounds a little like the days when there were still wars in Europe.
REPORTED BY DIRK KURBJUWEIT, CHRISTOPH PAULY, JAN PUHL, MATHIEU VON ROHR, CHRISTOPH SCHEUERMANN AND CHRISTOPH SCHULT
- • The Price of Unity: Was the Deutsche Mark Sacrificed for Reunification?
- • The Future of Europe: Merkel Pushes for Convention to Draft New EU Treaty
- • Europe's Next Crisis?: Silvio Berlusconi's Masterplan for Power
- • Parallel Universes in Paris and Berlin: Is the Franco-German Axis Kaput?
- • Barroso's Rise: Euro Crisis Means More Power for European Commission
- • Chancellor Schröder's Legacy: Germany's Leading Role in Weakening the Euro
- • A Cold Heart for Europe: Merkel's Dispassionate Approach to the Euro Crisis