Necessity, not inclination, nudges Europeans closer fiscally and politically

Still, Ms Merkel and her team are worried about Mr Hollande’s commitment to reducing the French budget deficit and to carrying out domestic structural reform, said Charles Grant, director of the CER, who was just in Berlin.   

The Germans are looking for a sort of "grand bargain" with Mr Hollande, Mr Grant said: French commitment to domestic reform and fiscal discipline in return for Berlin's accepting the beginning of a European banking system, a "growth pact" and a discussion of collectivized debt — and as important, "shifting the policy mix on austerity to be a little less austere," he said.