2012 Eurozone Financial Summit

[Germany (AaronH)]

In the light of the borrowing costs of Spain and Italy reaching new highs in recent weeks Chancellor Merkel has been forced to show her hand in regards to the German vision for the future of the Eurozone. With many German economists having vocally protested at the Chancellor making what concessions she has already made to the EU it will no doubt puzzle some as to what exactly the proposal will contain. Nether the less requests have gone out for the leaders of the Eurozone to assemble for a meeting in August in the hopes that the newest German proposal will be found acceptable and enacted as soon as possible.

[Slovenia (Antler)]

A diplomatic reply from Slovenia confirms that they will dispatch a delegation to this summit incorporating the Prime Minister and senior financial and economics Ministers as well as the European Commissioner and permanent representatives to Eurozone bodies.

[France (Angleter)]

President Hollande shall be in attendance, as shall the Finance Minister.

[Spain (MTTezla)]

Spanish President of the Government Mariano Rajoy and Ministers of the Economy and Finance Luis de Guindos and Cristobol Montoro will be attending.

Separately, Rajoy has requested to meet with the leadership of the United Kingdom, France, Greece, Portugal, Italy, and Ireland while at the conference to discuss measures meant to improve the economies of said countries outside of the stifling austerity measures of the German government.

[Germany (AaronH)]

As the leaders and finance ministers of the Eurozone file into the meeting the Chancellor of Germany, Angela Merkel was already stood at the podium arranging her notes before her. She and her Finance Minister had heard with some asperity to the speeches and rhetoric of the now President Hollande of France. All that they and the leading German financial analysts could draw from his speech was that he planned upon pushing for some regurgitated variation of Keynesian Economics in a economic environment where excess spending will only lead to a further soaring in lending rates for Eurozone members. Glancing upwards and seeing all the delegates seated she shuffles the papers before her before looking up at her contemporaries. Upon their faces could be seen their differing opinions of her and Germany, from the almost content look on the Austrian delegate to the almost openly hostile glance from the Greek Premier.

"Leaders of the Eurozone and other delegates, I call you here today in the hopes of outlining a plan for the future prosperity of Europe, a plan which shall work hand in hand with the austerity agreements I know many of you do not agree with on many levels. However, my proposal here today is not in fact for the introduction of new austerity measures, or even for the creation of some massive fund for investment as certain members of our group would no doubt favour. My and Germany's proposal is aimed at the root cause of the current problems besetting certain nations who can no longer easily cope with their debt.

As such we have come upon a proposal by a Belgian think tank from several years ago which we feel may well be applicable in this situation. However, additional security in the more advanced state of the world economy will of course be necessary. This measure is the introduction of a Eurozone Bond. These bonds will be anchored and registered to the collected economy of the Eurozone as a whole, allowing for many countries to borrow at a rate much better than that currently enjoyed by their own national government. An example of this can be the current average bond yield rate for Spain which at the last notification to me stood at 5.6%, however analysts estimate that the opening return rate on a Euro Bond at the current time would be roughly 3%. This would be a significant saving and would allow for a servicing of much of a nations more toxic debt.

Of course this will mean that Germany and France in particular may experience a small upswing in their borrowing rates due to this however the wider benefits will far outway this small discomfort. It seems prudent however that at the creation of such a bond an upper limit on initial lending using these bonds to service pre-existing debt should be capped at a 50% of GDP upper limit. This shall allow for countries with a large amount of 'black' or 'toxic' debt to use this new provision for the servicing of this high interest swift repayment debt which will of its own accord reduce budget deficit as overall interest payments are reduced by as much as half in some cases.

Access to these new Euro Bonds however should not come without some, shall we say, conditions, with the new austerity plan having been pushed through it seems that the introduction of some centralised authority with wider powers to review the budgets of all member states should be created. This body would have the power to restrict initial access to the new bond alongside stopping all access for a state which has shown no strides or inclinations towards moving towards a more balanced budget which stays within the Eurozone goal of a maximum of 3% deficit. This is not to say that these bonds would not be available to nations whose initial budgets are hugely outside of this goal and indeed the analysis undertaken by this new body, perhaps the Eurozone Central Financial Commission (ECFC) by name, would take into account all factors including projected plans for the moving towards Eurozone goals.

Finally, inherent in the agreement to this plan shall be the agreement that for all nations which currently or in the future present a balanced budget shall commit 1% of GDP or the difference between budget deficit and a 3% budget deficit, whichever is the smaller, to improve the liquidity and lending potential of the European Central Bank. This would mean that with the German deficit for 2011 having been 1% of GDP that in that year with a GDP of $3.3 Trillion a total of $30 Billion would have been paid into the ECB. These funds can then be allocated towards any minor liquidity injections that may be needed within nations or indeed wider investments as the need arises.

I await your comments,

Thank You."

So saying the Chancellor nods her head and makes her way towards her assigned seat at the conference.

[Spain (MTTezla)]

Rajoy raised his eyebrows. The German proposal was shockingly bold, and startling out of touch. He supposed that this detachment from reality likely drove the boldness of the proposal - a German government that believed that Spain's debt was selling for 5.7% when it was actually selling for 7.7% was undoubtedly more willing to take responsibility for paying it back. Further, he was surprised by the structure of the Eurobond issuance; the most recent panel of German economists studying Eurobonds had suggested that countries be allowed to borrow to cover debt accumulated after the first 60% of GDP, not up to the first 50%. The difference for Spain was that the suggested Eurobonds now covered about $700 billion instead of the German think tank's proposal, which would have covered only $100 billion of the Spanish debt. Perhaps the change had been made in error, but he would certainly jump at the opportunity for a bailout seven times larger than expected.

Leave it to the Germans, though, to put a blatant power grab in the middle of a proposal that would delay the collapse of Europe. He was surprised that Merkel didn't wear jackboots to these meetings.

"The Spanish delegation strongly agrees with the creation of Eurobonds, a responsible step in the rehabilitation of the European Union and specifically the Eurozone. It represents the necessary desire of the European countries to show that they are wholly and truly committed to each other, and unwilling to let financial difficulties come between the common European heritage that binds us together. It also shows the depths of our commitment, one which will prevent the continent from falling into poverty and chaos. When countries in Europe begin to fall apart because of intransigence, it has caused some of the darkest moments in the history of our continent.

"This is why attaching preconditions to aid of this type is so dangerous. The precaution of limiting Eurobond withdrawals to 50% of GDP is wise, and will allow countries to avoid the perverse incentives that might come with this type of guarantee. However, the strict limit of 3% of GDP for deficits raises questions about the legitimacy of such a proposal.

"First, we must determine how countries will have influence over the operation of such an ECFC. We have seen in the instance of the European Central Bank that the Northern European economies have a disproportionate say in the setting of interest rates, which has led to the current crisis. If there had been more input from Southern European states such as Greece, Spain, and Italy, it is likely that interest rates could have been raised, and the bubbles in each country curbed before this crisis had happened. Similarly, rates could be lowered now to reflect the state of the economy - specifically, that almost every country outside of Germany is now in recession and likely to stay that way. At the same time, the head of the ECB now feels comfortable willfully violating the charter of his own institution because of safeguards put in place by flawed agreements.

"If such an ECFC is established, each country must have significant control over the institution. All countries must have veto power, as they do over amendments to the structure of the EU, to any proposal to halt the sale of Eurobonds to countries on any grounds other than the upper limit of 50% of GDP. At the same time, countries must not be allowed to appeal to gain greater access to resources. To make this point, let me use the example of a similar situation.

"I refer the assembled states to a report issued by the German Der Spiegel news service, of which copies have been made."

His aides distributed the news story to the assembled representative.

"As you can see, the last time that Europe attempted to impose a limit on sovereign deficit spending, the more influential governments in Northern Europe only enforced the rules when it was less influential Southern European states that were outside of the rules. We cannot risk establishing another institution that will only have its rules changed when Germany steps outside of the boundaries established. The 'flexibility' proposed by the German delegation seems to allow for this possibility in the future.

"Indeed, it is reasonable for the Germans to propose such flexibility, for the deficit limit they have proposed is ludicrously harsh. The Germans propose that deficits be kept to 3% of GDP, but the average German deficit in the last 17 years is 2.67%, only barely below the average that they have set. Germany has violated this proposed limit six times in the last ten years.

"This is not an attack on Germany. The proposal is fundamentally sound, and needs only some modification. Further, we understand the German desire to see fiscal responsibility in the rest of Europe. But understand that the rest of Europe wanted to see this same responsibility from Germany in the last ten years, and did not see it. Instead of pressing the issue, we allowed Germany to show flexibility in dealing with a weak economy, for the sake of Europe as a whole. Germany must be willing to show the same flexibility now, or Europe shall certainly fall apart."

[Germany (AaronH)]

Merkel shakes her head at the wilful obstinacy shown by the Spanish delegate. When a proposal was made which would allow for countries to attain what essentially amounted to a bail out without the need for huge input by the stronger Eurozone economies when also coupled with the stated fact that Germany would rather than any other state be paying the largest amount into the new liquidity fund for the ECB. Leave it to a state which Germany had recently declared public confidence in as well as organising a new bail out for to immediately baulk at the idea of ANY fiscal responsibility.

"I apologise Mr. Rajoy but I believe you may have misunderstood. The ECFC would not be looking just at the 3% stated target goal for budget when assessing whether to limit the availability to the bonds. Instead as they shall be granted free access to review all relevant documentations within a nation if outstanding circumstances, for example a sovereign debt crisis was to occur again they would have the ability to work towards a proper solution which would allow for both a liquidity injection from the newly liquid ECB in combination with perhaps an increase in Eurobond availability.

The ECFC would be made up of a combination of technocratic ministers chosen from throughout the Eurozone and would not draw its staff from the mass of politicians. Instead its purpose would be purely analytical and its status would be made as a part of the very fabric of the eurozone, with ALL states equal beneath its purview.

While your observation as to altering interest rates by the ECB may have limited the impact of the debt crisis in the South of Europe may indeed have aided in some small way. What it would have caused in the North of Europe would be a rapid devaluation of the currency leading possibly to crippled growth rates and a reversal of the current situation which would have been equally as worrying as the current situation but without the
duel economic powerhouses of France and Germany to aid in what may have lead to multi-trillion euro bailouts.

I would also like to point out your attack on the ECB, while I feel it is unjustified it should be noted that the presidency of the ECB rotates between member states and indeed the current President is Southern European. The nationality of the President of the ECB should not be an issue in terms of its operating status and indeed our proposal would see a revision of the ECB's role specifically in regards to the new liquidity and investment funds which will become available.

In regards to the plea that any ECFC should be made answerable to every state in the Erozone I would argue the opposite, the ECFC would have to be independent of all to avoid the veto being used for personal gain to the detriment of the rest of the zone. As I have already mentioned the ECFC is envisioned as being a technocratic entity rather than a political one.

Once again, I and Germany have become tired of the repeated personal attacks upon German proposals solely because the German economy has demonstrated fiscal strength and the willingness to cut budget when needed. As already mentioned the ECFC will be flexible in its outlook and the moving towards budgetary balance can be years long, indeed as long as documentation and a clear plan is put forward current budget deficit is not the most important factor. It is the definite [/i]move[/i] towards it that is important and indeed it is the definite action that we believe shall lead to increased confidence."

[Spain (MTTezla)]

"Such is the problem," said Rajoy. "Technocrats have been appointed to the ECB who universally carry the same economic theories - those espoused by the German government. This is why the president of the ECB can be selected from the Italian government, but can still refuse to take steps which are necessary for the revitalization of the Italian economy. Northern European philosophy permeates through the ideology of all of those that are chosen for such positions, and it becomes impossible for them to do their jobs. How else do you explain the incomprehensible lack of action on the behalf of the ECB? You fear that there might be some minor slowdown in the economies of Northern Europe, but there is unemployment of 24.6% in Spain! Any institution that would preference the risk of slowing economic growth in one country slightly over putting a quarter of a country back to work is not a neutral institution.

"There is a basic lack of the fundamental nature of economics. Lowering interest rates will not artificially devalue the Euro - it is ludicrous to say so at a time when interest rates in Japan, the United States, and the United Kingdom are actually negative! But even if it did artificially devalue the Euro, Germany would actually benefit as an export-driven economy. This fear that a devalued currency will lead to economic ruin has no basis in economics, but is instead based in the hopes that it will lead to another term in office.

"This is a time of tense domestic political standoffs in each of our countries. History will not remember those that sacrifice European unity for the sake of winning a parliamentary election. This is a time for governments who would lead their people, not be blindly led by them. This is a time for governments to be bastions of stability and wisdom, not reflections of an increasingly hysteric population.

"Spain has done its part in this regard. Far from being unwilling to impose austerity, we have made massive cuts, putting our own people out of work in favor of keeping this Union together. It is time for Northern Europe to compromise its extremist populist views, to go to their people and explain the need for all of Europe to stand together. Those that lack the courage to do so doom us all."

He looked down at his papers.

"Thus far, to a point, we have all lacked that courage. But Germany ought not lecture other countries on the value of fiscal responsibility. Not when they amended the rules of the EU to suit their needs when they needed stimulus, only to change the rules again when other countries needed the same stimulus. If Germany does not untie the hands of Southern Europe, then there will not be a united Europe in the future. It is as simple as that."

[Germany (AaronH)]

Merkel sighs and shakes her head once again.

"So it seems that this proposal will fall to the wayside, not because of its suitability to the problem or its ability to solve the problems of Southern Europe but due to the inability of the Southern European nations, especially Spain in this case to accept any responsibility in their own current crisis and rapid rise in unemployment. This paper;

Paper passed around the room.

Written by a Portuguese economist outlines the causes for the unique situation in Spain which is quite different from that in other Southern European states and indeed is based around Spain's formerly massive reliance on the construction sector coupled with banking allowing for a high level of public debt to accrue to the highest factor in Europe.

Indeed the paper written before many of your most recent reforms in Spain would laud the actions taken so far in continuing reforms and with the Spanish having been able to post a near balanced budget on many occasions, the development of a plan which will allow fiscal prudence and growth including investment from the new ECB liquidity fund which will be outside of budgetary concerns should serve to allow Spain to diversify and begin to reduce unemployment numbers.

As you doubt are totally aware Herr Rajoy, the situation in Spain is unique and was brought about due to a government unwilling to act against a massive surge in building and construction firms far past a sustainable amount. Indeed the beginnings of a downturn in Spain was seen in 2006 a year before the financial crisis proper which just exacerbated the pre-existing trend. I would therefore state that this attempt to try and include Spain in some 'Southern European' bloc within the eurozone is absolute fallacy and any attempt at Spain undertaking the same exact measures as Greece or Italy without first addressing its own unique issues would be unwise and the delegates of Greece and Italy would do well to remember this.

Let us now look at Greece, the reasoning for the major problems there are twofold, first came flawed bookkeeping throughout the 1997-2007 period leading to an inability of the central government or the EU to act in a quick and succinct way. This was compounded due to the state of the Greek economy from 2000-2007, that being, strong regular growth of around 4-4.5% and due to falling bond yields as well as investment from the EU as a whole leading to the government of Greece feeling secure in running huge structural deficits. However, the banking crisis broke which was not foretold and thus the 'budgeting on the margin' approach of Greece proved to be catastrophic in terms of their economy with borrowing rates surging through the roof and investment drying up due to the crisis being international. Following the crisis Greece has found itself needing to rapidly enact changes which preferably would happen over a long period of time. With the current proposal by myself, the ECFC and Euro Bonds would give Greece that leeway and as long as a structured plan for fiscal prudence and debt reduction is put forward they shall be enable to move back to economic strength. Indeed, they will also be given definite investment from the new ECB liquidity fund in addition to the Euro Bond and this shall allow for more accurate forecasts and a much more sustainable plan for the future.

The situation in Italy is similar in scope with estimates putting Italy as needing to borrow upwards of $500 billion in the coming years as a minimum to service its long standing debts. While its current borrowing rates soars the advent of the euro bond will be able to grant security to the government in knowing access to strong bonds with good yield rates are assured. Indeed, this should also reassure investors and raise global confidence due to the insecurity about future budgets being alleviated.

Indeed, my proposal must be looked at as a whole not as separate parts, with each of the three parts of the proposal supporting the others and aimed specifically at issues within Southern Europe and international financial confidence in the Eurozone as a whole. This plan will buy the Eurozone the three things it needs, Time, Confidence and Assured Investment.

If you are so worried about achieving re-election due to having to enact measures which have been unpopular, well, I propose that this measure be voluntary. If a nation wishes to join the Euro Bond initiative it may do so and receive the benefits of the new liquidity investment fund also as long as they move towards achieving budgetary and financial prudence. However, if the wish is to bolster their own popularity at home in the hopes of securing a further term in office at the expense of the economy of their home nation than they may choose to reject the proposal put forward by Germany."

[France (Angleter)]

The smile that Hollande had struggled to hide as Merkel started her speech had long subsided, as the old argument- it seemed an old one, at least- about German austerity plans re-emerged. He thought it best to interject.

"Firstly, let me say that I am pleased that the German government has agreed at least to the principle of Eurobonds and debt pooling, which we see as an important step both towards European integration and solidarity, and towards the solution to the problems that face our project and the single currency. The Republic also supports the level of debt that Germany proposes be pooled, and find nothing wrong in the plans for more fiscally-sound nations to fund the ECB, although we should be sure to review this measure some years in the future."

"However, we are most concerned about the other side to the German government's proposals, that is the proposed ECFC and the additional conditions for use of Eurobonds. There is nothing in this that we see as necessary, given the Fiscal Compact. According to the Fiscal Compact, the Commission and Council oversee the signatories' budgets, and the Court of Justice imposes penalties on transgressors. France sees no reason whatsoever to appoint a whole new junta of so-called 'technocrats' to pass judgement over our national budgets and take over a role that the Fiscal Compact assigns to existing European institutions far more connected to the political reality of the matter."

"What France would propose is amending the Fiscal Compact to add suspension from the Eurobond system to the list of penalties that the ECoJ can impose upon nations that have been found in violation of the parameters set by the Fiscal Compact. This shall be both prudent and, through the role in the Fiscal Compact of the Commission and Council, pragmatic and flexible."

[Spain (MTTezla)]

Rajoy couldn't help but chuckle at Merkel's statement.

"Of course the individual circumstances in Southern European states were different before the crisis - the Eurozone is more divergent economically than a random sampling of countries. Saying that there is no Southern European collapse because there are different reasons for the weakness of the economies is like saying that there was no recession in the United States these past five years because it was in fact a construction bubble in Arizona and Nevada, a budgeting issue in California and Western states, a transitioning industrial issue in Ohio and the Midwest, and a union problem in Michigan. The underlying weakness in economies is less important to the studying of a collapse than the universal trigger - the American crisis was a banking crisis, because it was the collapse of the banking system that turned every other problem that I just mentioned into a dire problem that risked the state economy.

"Similarly, this a confidence crisis because it has taken manageable problems, which exist in every country, and made them into crippling problems, with the help of austerity measures.

"But further, let us look at this paper. This paper was published nearly a year ago, and uses data almost entirely from 2010. Why is this important? Because in 2010, Spain didn't need a bailout! In fact, the paper that you cite is about the Spanish recovery. Obviously, there is no Spanish recovery, and this is why this paper suits your needs. This paper is designed for augmenting a Spanish recovery, not developing one, and certainly not for justifying the role of the ECB in the collapse in the first place.

"But even if you don't believe that, look at the actual suggestions of the paper. The paper notes, correctly, that the instability in Spain was driven by unsustainable levels of private debt. Why was there this ballooning private debt? For the same reason as in the United States - interest rates were kept artificially low for too long. This paper simply confirms what I said in my first set of comments; the ECB caused the crisis in Spain because it looks after Northern European interests first, and leaves Southern Europe to fend for itself.

"You misunderstand my comments about seeking reelection. It is you, Ms. Merkel, that is too afraid of reelection to act justly. As the French delegation points out, there are already methods in place to prevent freewheeling spending in the future. As a result of this crisis, the Spanish Constitution has been amended to say that the budget must be balanced by 2020.

"Spain would generally support the proposal of the French delegation, though with the cautionary note that the Court will likely face greater political polarization in the future from states that have already shown themselves willing to undermine European unity for political gain."

[Germany (AaronH)]

Merkel had reached what had amounted to her tether with the Spanish delegate's willful ignorance.

"You cannot draw parallels with the United States of America in regards to the South of Europe. There is one simple difference, the US states are integrated into a single economic unit and are all willing to follow one particular technique put forward by a central authority. However the Eurozone does not have this advantage, the disparate views and governments are, as you have demonstrated so ably Herr Rajoy, willing to argue against measures purely for their own sake. Indeed, some might say you are looking a gift horse in the mouth as the British say.

The report I brought forward is valid as it explores the willful negligence of a Spanish government unwilling to stop a ballooning construction sector. Why did they do this one wonders? You point towards a lack of help and advice from the ECB yet it seems to me that that the appointment of a Minister of Finance unable to see the symptoms of a possible burst to this construction bubble must be laid at the feet of the domestic government. Or perhaps the best option is to point to the soaring approval figures due to the huge drop in unemployment figures and strong growth rates this construction boom temporarily granted for Spain and the very thing you accuse myself and President Hollande of, letting politics come ahead of sound economics.

Your concerns with the ECB are noted Mr. Rajoy, however it is intriguing to note that it is only your voice raised against that body whose only purpose is to ensure favourable interest rates for a majority of the GDP of the Eurozone. If this meeting can agree that revisions to the setting of interest rates are needed than so be it, however without the agreement of the majority of the Eurozone, I and Germany are reluctant to commit to putting forward a further proposal to be shot down simply because it originates in Germany.

As for the fiscal compact, yes, this treaty is indeed a measure approved and supported by myself and the German nation, however it is not exclusive to the Eurozone. Therefore, due to the uniquely Eurozone exclusive nature of the Eurobond and ECB investment fund it needs must a separate agreement and overseeing authority be established. Our wish is not to set up a junta as you term it Herr Hollande, rather we wish to set up a body able to act swiftly and decisively without the problems of drawn out conferences or indeed the whims of any one state. It is well known that the German constitutional court for example delays mine own support for measures and similar measures in other European states force us to delay any reaction to crises of this nature.

My only wish is to allow, for the Eurozone a third option to the two currently before us, the first is to wait out the storm as a bloc and most likely lose Greece from the combined currency due to the problems of their spiraling bond yields and deficit. The second is to take the path of Herr Rajoy here and try and break the Eurozone into blocs and push all the blame away from himself in the hopes of winning him domestic support and secure his own election for a new term. Or we can work together and take the next step towards integration to allow for a solution to the current confidence crisis. We can put aside the differences in our personal politics and economics and embrace a wider view.

Herr Rajoy, Herr Hollande, delegates, my proposal is not one which will gain me any support in the bundestag or from the people of Germany, indeed opinion polls have been against any further German monetary investment in other nations. I fully expect to lose some popular support due to these measures however they must be passed or we can watch the Eurozone dissolve, defeated by an unwillingness of certain states to compromise.

The choice is yours."

[Spain (MTTezla)]

For some reason Rajoy did not like the sound of his name in German. "Herr Rajoy" sounded like he was a Francoist seeking funding for more Messerschmidts. Sighing, he set aside the thought for another time, more appropriate for linguistic philosophy.

"Perhaps we should take a step back," he said, concerned academically that the Germans would invade Poland if made any more angry. "We will not reach an agreement today on the causes of the economic crises within any individual nation here. There is a philosophical divide over the role of the ECB in setting interest rates, and as Chancellor Merkel has pointed out, this can be set aside for now.

"Further, I would remind all present that most of the people sitting in this room were not those who set financial policy when the roots of this crisis were sown. Those names are Gerhard Schroeder in Berlin, Luis Zapatero in Madrid, George Papandreau in Athens, Nicholas Sarkozy in Paris. We are not those administrators, and we should all, myself included, refrain from throwing barbs at each other for their actions.

"With this particular reform placed before us, there is only one point of contention. President Hollande and myself have suggested that the role of financial oversight be provided by enforcement of Fiscal Compact and the Court of Justice, while Chancellor Merkel has proposed instead a new body to handle this responsibility. I believe that this is a difference of opinion that can be resolved if we remain level-headed.

"I propose a compromise. The nations assembled today should be willing to establish not just the framework for a new, Eurozone-specific regulatory body, as suggested by the German delegation, but should also be willing to vet the particular members in this meeting. This is a nod to the Spanish and French desire for more accountability from those appointed. If we are able to determine the membership of this body and the method for appointment in the future, then I suspect that this proposal, which is already widely supported, will be able to be passed easily.

"To do so, however, we must be willing to set aside the fingerpointing of both sides of this disagreement so far."

[France (Angleter)]

"I must wonder how Schroeder and Sarkozy are at fault for this, Monsieur Rajoy, since the former left office years before the latter came in. I assume you are referring to President Chirac. Regardless, let me say that I share Madame Merkel's vision for greater European integration and a strong Eurozone. However, I still have a somewhat differing view on how to achieve that vision."

"Given that we are enforcing the same budgetary rules as the Fiscal Compact, which I see given its dependence only on Euro states for ratification, and its differentiation between Euro and non-Euro signatories, as a 'Euro Plus' arrangement. These measures proposed by Germany can, I believe, be incorporated into it. I find it curious that Germany's proposed new treaty establishes a new body for overseeing effectively the same thing. Perhaps, provided we make the ECFC accountable to the European Council and Commission, we could incorporate the ECFC into an amendment to the Fiscal Compact, and make it responsible for all such oversight?"

[Spain (MTTezla)]

"Schroeder was responsible for weakening the Eurozone rules, and Sarkozy and Zapata responsible for taking advantage of them," said Rajoy, realizing that he had explained poorly. "The French proposal is acceptable, but we would still like to establish exactly how the membership would be selected before appropriating such sweeping powers to a single body."

[Germany (AaronH)]

Merkel glances askance at the Spanish minister before responding in a resigned tone of voice.

"In regards to making the body answerable to the commission and council, we would not be opposed to this as long as any disputed decision can only be overturned by at minimum a two thirds majority of the Eurozone member states. While I understand to some degree the reasons for your rapid verbal aggression against several predecessors of myself and President Hollande perhaps we would be best served with leaving of personal insults and attributations to the broad sheets as no doubt the press of several nations will continue to vilify every action the government of France and Germany take in the present day.

Either way, the appointing of people to the body would be simple, a list of qualified economists should be drawn up by the nations at this body and the council, of 12 men at first estimate, will be chosen by ballot of the Eurozone states. As these men should not be politicians this will allow for us to choose men without regards to nationality or political alignment to give an unbiased and specialist body. Would you find this to be an agreeable arrangement?"

[Spain (MTTezla)]

Rajoy was stunned by the German's ability to take offense. He had listed off a former German leader, a former French leader, and a former Spanish leader, and Merkel had willfully ignored the last of the list. He suspected that the Chancellor regretted her reasonable offer and was hoping to start another fight to get out of her promises - not a novel approach for the country that had avoided its World War I debts by throwing all of Europe into war. In any case, he would not let her succeed.

"I find this arrangement to be agreeable," he said. As he well should - core European nations were normally terrified of simple majority votes, outvoted as they were by the plethora of small southern states. Rajoy had little doubt that the majority of the economists would be more in favor of the carrot than the stick once elected. "I recommend simply that there be an odd number, perhaps 11, to avoid the risk of a potential tie in a close decision."

[Spain (MTTezla)]

After a pause, Rajoy looked around the silent room. "I think it's about time that we moved to a vote. Spain is in favor of such a proposal."

[Iran (Dax)]

[[Thank God for this.]]

While the motion to vote is pending broad consensus by key Eurozone members, the following nations have declared their intent to vote in the following manner:

Yay: Bulgaria, Cyprus, Denmark, Estonia, Hungary, Ireland, Italy, Lithuania, Latvia, Luxembourg, Malta, Netherlands, Portugal, Romania, Slovakia, Spain
Nay: Austria, Belgium, Czech Republic, Finland, Greece, Poland
Undeclared: France, Germany, Slovenia, Sweden, United Kingdom

Because the Council vote at hand concerns an economic matter, particularly concerning the European Union's finances, and is [[presumably, anyway]] acting upon a proposal from the European Commission, it requires a majority [[55%]] of EU countries and a two-thirds [[65%]] majority of EU citizens. Currently, a majority of countries are in favor (59%), however with approx. 197m citizens in favor, falls short of population requirements by approx. 114.5m citizens. In order to pass, the proposal will require Yay votes by two of the following countries: Germany, France, UK. If two of those nations vote in favor, the measure will be passed regardless of votes by Sweden and Slovenia; if two vote against, the measure will fail even with the support of the remaining three undeclared votes.

[Slovenia (Antler)]

"Slovenia votes navy."

[Germany (AaronH)]

Germany votes AYE

[France (Angleter)]

France votes AYE.

[Iran (Dax)]

Proposal is considered passed.