24 May 2012

Euro agony spoils US party

Rahm Emmanuel (pictured on the right), the mayor of Chicago knows how to throw a good party.

He invited the hundreds of journalists who had covered the Nato summit in his town to a get together in a bowling alley. Free booze, food and bowls till midnight. It was the kind of generosity that has become less and less common in times of austerity.

Pursued by two enormous but discreet body guards, the former ballet dancer, turned Congressman and Barack Obama‘s first chief of staff, moved nimbly from one group of guests to the next.

Rahm presses the flesh with ease but he is also curious. And the one thing he wanted to know about from my German colleagues was how Angela Merkel was doing and what here intentions were in the whole eurozone mess.

His questions were apparently very precise.

How much domestic pressure was she under to shun Eurobonds and any notion that German taxpayers might have to fund Greek profligacy?

How popular was she at home? (very is the answer). In fact the more she is attacked abroad for not writing German cheques the more she is appreciated at home as the Iron Chancellor.

Before he left the mayor confessed that he was so interested in Angela Merkel’s next moves because they could have a direct bearing on his former boss’s chance of staying in the White House.

This was indeed honest. White House officials have begun acknowledging – begrudgingly – that the euro agony could determine the future of their own delicate recovery and thus the outcome of an election that is predominantly about the economy.

America likes to be in charge and no one here relishes the idea of being dependent on events that are not just beyond their control but also impenetrably complicated.

Channel 4 News special report: Europe on the edge

Obama himself acknowledged this in Chicago when he talked about the eurozone being a conglomerate of 17 US Congresses. It’s enough to make you reach for the aspirin or stronger. The US can do very little but sit on the edge of the sofa and hope for the best. Like the rest of us.

It is also ironic that the one man whom President Obama – derided as a socialist by the Republicans – might want to give a wide berth, has suddenly become the administration’s new best friend.

Francois Hollande, France’s freshly minted leader is the kind of European socialist whom most conservative Americans would describe as an unreconstructed Marxist – in other words he believes in taxing the rich, universal guaranteed healthcare and expensive public works projects etc.

But as an advocate of Eurobonds and Keynesian growth economics he has become very popular with the administration. And useful. Hollande is seen as the best guarantee for reigning in the Queen of austerity in Berlin.

But ultimately Chancellor Merkel has to decide between winning her own election and helping Obama win his. I have no doubt how she will decide.

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