EU summit: Was Angela Merkel the winner after all?

Angela Merkel cheers the German football team during the Euro 2012
Image caption Angela Merkel may not take it all but her strategy could still make her the big winner of eurozone negotiations, according to German papers

After initially painting Angela Merkel as the loser of last week's EU summit, German papers are reappraising the chancellor's concessions as part of a smart strategy to secure greater gains.

In football, you know the winner the moment the final whistle blows. In politics, it is not so simple.

After the European Union summit on Friday everybody, including the German papers, concluded that Spain, Italy and France were the big winners and Angela Merkel had gone home with a bloody nose.

They had united, stared across the table with their steely eyes - and she had blinked, gulped and given away what she vowed she would not.

But, after a weekend of reflection, a new more charitable counter-view is emerging. It is that Chancellor Merkel did concede - but resisted far bigger things on which she was determined not to bend.

She also bound France into the "fiskalpakt" on which she thinks everything else depends. So runs the argument in Monday's German papers.

Victory in disguise

Her big concession was to allow direct aid from the eurozone's permanent bailout fund to banks in difficulty. The cash need not go through central governments.

But in return, she got a commitment to set up a central supervision authority for banks run by the European Central Bank.

In other words, Chancellor Merkel got an acceptance from France that supervision of French banks would happen from outside France - from the ECB, to be precise.

Sovereignty, on this argument, would be transferred from Paris to the ECB's headquarters in Frankfurt.

As Guntram Wolff of the Brussels-based Bruegel think-tank put it: "The tone of the summit certainly made it look like a big defeat for Merkel, but on the substance of what was agreed I don't think it was."

"The direct recapitalisation of banks can only come once this new bank supervisory body is up and running. This has been her strategy all along - yes to aid, but only once the proper controls are in place."

The Spiegel columnist, Christian Rickens, also discerns victory in the apparent defeat for Mrs Merkel: "At first glance, it looked as though Chancellor Angela Merkel gave up several core demands during the EU summit on Thursday night," he wrote.

"But did she? A closer look reveals a clever retreat to secure greater gains."

And his conclusion: "Should one be looking for a summit loser, in fact, it is necessary to look no further than Hollande. Not Angela Merkel. She merely did what she always does on the EU stage. She made compromises. And pretty clever ones at that."

What she also got, so the reasoning runs, was a commitment to the fiscal pact from President Hollande, despite its unpopularity in France.

'Land a punch'

There had been a feeling in German government circles that Mr Hollande was lukewarm on austerity - but, nevertheless, he has given a commitment, extracted by Chancellor Merkel, to balance the French books.

Image caption Francois Hollande has committed to Germany's fiscal pact despite its unpopularity in France

Chancellor Merkel is too pragmatic according to some who argue that she bends too easily to popular mood, as she did, they say, when she tore up German's policy on nuclear power shortly after the Fukushima disaster.

Pragmatism, in this book, is seeing which way the wind blows and going with it.

But her defenders say that Mrs Merkel's pragmatism is rather to seek compromise in a complex world - and that this is what she did in Brussels.

The Merkel defenders says she recognised realities. As the Spiegel columnist put it: "It is also clear to Merkel that she can do no better in the euro crisis than prime ministers Mario Monti in Rome and Mariano Rajoy in Madrid.

"Both have pushed through far-reaching reforms, to the point that they have come under strong domestic resistance. In Italy, elections are scheduled for next spring. As such, it was vital that Merkel allow Monti to land a punch or two."

So the Monday after the weekend of reflection sees a reappraisal among some of the critics in Germany. Chancellor Merkel constantly says there will be no magic single solution to the euro crisis - it will be step-by-step.

Accordingly, for her it is a long game with concessions granted in return for bigger gains - a rough road to be negotiated one step at a time. Everybody hopes it does not lead over a cliff.

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