Investors: Merkel, Sarkozy Plan a Letdown

Investors want big moves, not baby steps
By Mark Russell,  Newser Staff
Posted Aug 17, 2011 6:25 AM CDT
Investors: Merkel, Sarkozy Plan a Letdown
France's President Nicolas Sarkozy, left, welcomes German Chancellor Angela Merkel at the Elysee Palace, in Paris yesterday.   (AP Photo/Philippe Wojazer, Pool)

Yesterday's meeting of French President Nicolas Sarkozy and German Chancellor Angela Merkel underwhelmed markets, which had been hoping for more radical steps to help the euro zone, reports the Wall Street Journal. It seems investors want more than what the two proposed—among other things, an elected euro-zone president—as Sarkozy's announcement that France and Germany were against creating euro-zone bonds or enlarging bailout funds sent money streaming into US Treasurys.

"We can't solve problems in a big bang," Merkel said. "What we are proposing will allow us to regain confidence step by step." But with 17 countries sharing a currency but not fiscal authority, experts say the euro zone is fundamentally flawed—and will continue to be, unless the proposed euro-zone head is handed the power to sanction profligate spenders. "A fundamental discrepancy remains between what markets need and what politicians can offer," said one bank economist. (Read more France stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.