The sound of back-pedaling could be heard in Berlin on Monday after fiery comments by Angela Merkel at the weekend about the French and Italian economies.
German Finance Minister Wolfgang Schaeuble set out to be conciliatory after Paris and Rome expressed dismay following criticisms that they did not have the stomach to cut debt, and should do more, and quickly, to respect EU rules.
“Italy has passed a remarkable reform to its labour market in its legislative assemblies, France has been taking additional measures all the time.We are all on the right track and in Germany we also have to make an effort,” he said.
In March the European Commission is to rule on whether or not France and Italy have their debts under control and respect EU deficit limits. If not France could be fined and Italy could be placed under a disciplinary procedure.
This latest delay is thought to be the final chance for the pair to convince the EU executive they are serious about cutting debt.
