BERLIN — Every phrase that German Chancellor Angela Merkel and French President Nicolas Sarkozy utter Monday as they unveil proposals to reform the euro zone will be dissected for hints of what many want to hear most: plans to intervene quickly, and on a massive scale, to stop Europe’s financial crisis. But few inside Germany expect them to come.
Merkel, widely seen as the woman in charge of Europe’s future, has repeatedly ruled out dramatic, speedy fixes. But if the French-German proposals do not produce just that, they could disappoint investors who have been banking on a solution — potentially making the crisis even worse. Many euro-zone officials have said that whatever leaders agree on at a summit at the end of the week will make or break the continent’s finances.
Skeptical Germans see a pattern, as hopes for comprehensive solutions have built before one high-profile meeting after another this year, only to crash back to earth when leaders yet again fail to halt the crisis.
“This summit will be just another big disappointment for those who expect something big,” said Clemens Fuest, an economist at Oxford University who is an adviser to the German Finance Ministry. “Ahead of the summit, we see the usual process. Expectations are very high, and then Merkel comes in with her expectations management.”
In a much-anticipated speech in Germany’s parliament last week, Merkel said little that she hadn’t said before. She called for treaty changes that would make the rest of the euro zone behave more like Germany, and compared Europe’s work to a marathon, not a sprint.
But German officials acknowledged privately Sunday that despite her focus on long-term fixes, they will need to take short-term measures to calm markets and help troubled countries such as Italy and Spain with their borrowing costs, which have spiked to euro-era records in recent weeks.
Still, as the tone inside Merkel’s office remains dead-set against the fastest ways to cap the crisis, a growing number of critics are complaining that she and Sarkozy aren’t moving quickly enough.
“These days, Europe needs one more treaty a lot less than immediate steps,” said Francois Hollande, the Socialist candidate for French president, in an interview with the French weekly Journal du Dimanche. “I recall the experience of the European constitution treaty: months and months of negotiations, then ratifications, only to be rejected. We cannot wait.”
The European Central Bank could print a vast pile of euros, using them to guarantee that countries can borrow money if they need it, but that sets off German memories of 1920s-era hyperinflation and goes against the country’s abiding faith in a rock-solid currency.
Alternately, the European Union could announce that countries may borrow money with the backing of the full euro zone — “eurobonds” — putting Germany’s powerful credit on the line. But that would make Germans feel as though they were subsidizing other countries’ more generous policies, and Merkel has ruled that out until others commit to be more like Germany.
Dampening hopes for another possible route to ease the crisis, a senior Chinese official said late last week that her country was unlikely to use its mammoth reserves of cash for a Europe rescue. “The argument that China should rescue Europe does not stand, as reserves are not managed that way,” Fu Ying, vice foreign minister, said in remarks prominently reported by Xinhua, China’s state news agency.
That leaves Europe to take care of its problems largely on its own. The United States has ruled out contributing more to the International Monetary Fund to bolster its funds, which currently aren’t enough to meet Europe’s needs, though Treasury Secretary Timothy F. Geithner is flying to Europe this week to meet with officials.
Many inside Germany argue that Merkel is simply holding out to put as much pressure for reforms on laxer Southern European countries as possible. Already Italy has implemented austerity measures, Spain has passed a constitutional amendment to limit its debt and Greece has sworn to crack down on tax scofflaws — changes that seemed unthinkable just a year ago.
“Maybe this is just a poker game,” said Ulrike Guerot, the head of the Berlin office of the European Council on Foreign Relations. “Merkel is in a way bluffing, pushing all of these people toward reforms.”
What worries some analysts is that it’s not clear if there’s a point of no return — a situation in which the crisis becomes so acute that it defies all efforts to end it, even if Merkel drops her opposition to helping support the rest of Europe’s debt or to the European Central Bank printing more money.
“She’s trying to solve the crisis instead of just stopping it, using the situation to change the union. And it’s a gamble,” said Ferdinand Fichtner, an economist at the German Institute for Economic Research. “There clearly is a risk that she might push it too far.”
Should Merkel have a change of heart, her ability to act unilaterally is limited within her own country. The German Constitutional Court ruled in September that the parliament — and hence, Merkel’s own deeply divided coalition — would have to be consulted on matters related to the bailout, and it explicitly ruled that letting other countries borrow against Germany’s credit was illegal, meaning that any change would require extensive preparation within Germany itself.
And the 2013 elections are not far from her mind; committing to an unpopular bailout could jeopardize her chances of reelection and make her the latest in the lineup of European leaders who have been deposed during the economic crisis.
A wily political fighter, and a calculating physicist — her profession before she turned to politics when East and West Germany reunited — Merkel has either been plodding or methodical through the crisis, depending on who is asked.
“She has good nerves,” said Gerd Langguth, a political scientist at the University of Bonn who wrote a biography of her. “She does not like to be hurried, especially if this pressure is coming from other countries.”
Correspondent Edward Cody in Paris contributed to this report.