Bickering over the European Budget

The latest report about how Europe's nations will be bailed out, what the role of the International Monetary Fund will be, whether Germany will block plans that cost its taxpayers too much, and the role of the United Kingdom in proceeding toward a comprehensive solution to these problems has scuttled hope that resolutions are just around the next corner.

It has been rumored recently that Spain will receive a partial bailout and that this will trigger European Central Bank purchases of its sovereign paper. This will in turn bring down the rates Spain must pay to raise money in the capital markets.

The latest bickering is between Germany and the U.K. Britain's role in most of the big issues of recasting the finances of the region has been limited until now. The Financial Times reports:

Germany is planning to warn Britain that it will seek to cancel next month's European budget summit if David Cameron, the prime minister, insists that he will veto any deal other than a total freeze on spending.

Angela Merkel, Germany's chancellor, does not believe there is any point in holding the budget summit to agree on a seven-year framework for EU spending if Britain intends to veto any deal, say people close to the negotiations.

Douglas A. McIntyre