ABSTRACT
The crisis in Europe with government elites struggling to contain the further unravelling of the region’s monetary affairs continues. While the repertoire of adopted measures consists mostly of drastic reductions in social spending and the forceful restructuring of state-society relations, it can also involve significant adjustments by member state governments and private capital market actors as demonstrated by the recent negotiations undertaken in Brussels regarding the structure and capabilities of the embryonic European Financial Stability Facility (EFSF) and the resolution of Europe’s sovereign debt crisis. With respect to the former, the apparent divergence in views registered between France and Germany regarding the institutional fit and operational compatibility of the emergent institution with the European Central Bank (ECB) has brought to light the deeper rifts within the European Heartland, tempered only by the achievement of consensus on the matter of the capitalisation of the European banking sector and the priority to secure financial stability in the immediate term.
