From this side of the Channel it looks as though Angela Merkel has pulled off mission impossible.
Against the odds, she's managed to save the euro, for now at least, while also winning faint praise from most of her European critics – those in Germany who want the eurozone broken up and the Deutschemark back, but also those who have been urging her to take a stronger lead in rescuing the grand European project. No mean feat.
Perhaps the most telling thumbs-up came from the headlines in Bild, Germany's most populist daily newspaper, which claimed that by forcing the private investors to share the pain by taking part in the bail-out, Merkel had secured a victory for Germany and the euro. In the French press, she's turned quickly from "Madame Non" to "Madame Oui", while even Berliner Morgenpost, which has accused her of being too sombre in the past, of not showing "staatsmännisch-gockelhaftes Gebluffe" – not enough "statesmanlike, cockerel-like showing off" has given her a rare slap on the back.
But, when the chips were down, Merkel showed nerves of steel, her grittiness came across far better than the more showy Nicolas Sarkozy, or Jean-Claude Trichet for that matter. Anyone watching her in Brussels on Thursday after the summit could see that it's precisely her sober style which is so compelling; and that her scientist's obsession with facts looks as though it's been turned from a weakness into a strength.
It was Merkel who pushed her fellow politicians to insist that the French and German banks and other private investors, which hold much of the Greek debt, must take a haircut of 21 per cent on their bond holdings – this means the banks will lose about a fifth of the value of their bonds – as punishment for having lent to Greece in the first place. And it's attributes such as these that seem to have won over the German population to the ¤109bn bailout.
It was an interview with German TV earlier in the week which people say was a turning point for her. In ARD's interview with the Chancellor, Merkel explained that the "money and the savings of the German people are safe" – a sentiment which hasn't been expressed quite so fully since the euro crisis erupted three years ago.
For the Germans, this was important psychologically because it broke some of their most feared taboos over the euro and why they should transfer more money to their southern neighbours. What she was saying to viewers was that their hard work will not be compromised by a reckless bailout. Decoded, she was saying BMW factory workers won't have to pay for Cretan taxi-drivers.
However, what she hasn't spelt out, but everyone knows implicitly, is that Germany has benefited enormously from the eurozone; the effective price at which the DM converted into the euro gave her a 30 per cent devaluation, and the German industrial powerhouse is still motoring on the back of that advantage. (Ironically, the poorer southern countries went into the euro at a too-expensive exchange rate). You only have to look at booming sales of Mercedes and Bosch fridges to the US, China or India to see how competitive their goods became. As Merkel should perhaps be telling them, you can't have your cake and eat all of it.
This latest Greece rescue, which was to have been called a Marshall plan until the Greeks pleaded for it to be taken out of the communiqué at the last moment, deserves our support. Hopefully, by allowing this Greek version of an Argentine default, the politicians have broken enough euro rules so that other countries can refinance their debt in a more orderly fashion.
The big question which everyone in Europe, including the UK, wants answered is whether Greece – and the more wobbly Portugal and Spain – will now accept more pain in the short term by getting to grips with their "internal" devaluations – price-cutting to you and me. As the Irish are showing, it's possible to have growth by combining a tough austerity plan coupled with some price adjustments, and now the current account is in surplus.
Who knows, if Merkel helps bring down the price of an Athenian espresso, she may even find herself elected again in two years' time.
Time for vindicated Cable to call for a reform of media plurality rules
If David Cameron made a huge error in hiring Andy Coulson, he made an even bigger one in stripping Dr Vince Cable of his role in deciding on Rupert Murdoch's takeover bid for BSkyB after his indiscreet remarks to The Daily Telegraph's undercover phone-taping reporters.
How Cameron must be kicking himself, as he wouldn't be in such a mess today if he'd let Cable get on with his job, which Cable always made clear was a complex one involving ambiguous arguments about "media plurality".
Cameron shouldn't have been so worried about letting Cable decide on BSkyB because he should have trusted Cable to be independent – in that personal views would not have clouded his judgement; and in the same way that we would not expect the PM, who has failed to deny chatting to News International execs about BSkyB, would not have let any outside influence affect his judgement.
It was always clear that Cable would refer the bid to the Competition Commission (CC) since there were proper competition grounds for doing so – Murdoch's newspaper titles have some 40 per cent of the market and Sky around the same of broadcasting.
During the secret, unlawful, phone-taping incident – which I believe to be every bit as nefarious as the hacking of phones – Cable also made clear that, while he had "declared war" on Murdoch, he had a quasi-legal decision to make, and would do so. Sending the bid to the CC would have allowed the right people to debate the complexities.
I'm sure Cable is enjoying his moment of "I told you so" – not about Murdoch but about sticking to the procedure. What we need to hear from him now is that the Government will look again at what we mean by media plurality. In a 24/7, digital news world, today's definition looks pretty meaningless.
How ironic this is. If Cable had been allowed to refer the matter to the right authority, Murdoch's bid would be in limbo today but might have had a chance of surviving.Reuse content