When these two step out for lunch, the whole of Europe watches. While Sarkozy and Merkel primped in preparation for their Euro-tastic mega luncheon session on Monday morning, the markets jumped. As of 10:30am, Germany's DAX gained 0.9%, the CAC was up 1%, and Italy's bourse saw the greatest gain at 2.1%. The FTSE is also up, albeit tailing behind other markets with a 0.6% increase.
The Merkozy duo are under intense pressure to come up with some practical and efficient ways to prop up the euro, help out debt-laden countries and facilitate the departure of defaulting EU nations should the need arise. Hardly appetite-whetting stuff. MT can't be at the meeting, but we imagine their lunch will go a bit like this:
Merkel: A Red Bull [She's skipping the starter after Berlusconi's jibes about her weight]
Sarkozy: French onion soup, but hold the croutons - we're in a recession, n'est-ce pas?
Topic: A catch up on the progress of austerity cuts across the EU nations. Italy has agreed to slice a £26bn chunk out of its public sector spend. New PM Mario Monti has now signed off a whole host of tax increases and pension reforms to meet the EU mandate - he's even slashed his own salary. These measures, alongside a crackdown on tax avoidance, should see Italy meet its budget targets by 2013. Meanwhile, in Ireland, Prime Minister Enda Kenny has made an emergency state address to the nation to announce his proposed €3.8bn austerity budget.
Merkel: Knockwurst and sauerkraut
Sarkozy: A rare and bloody steak. He's feeling primal.
Topic: The EU bigwigs will then have a heated debate on sovereignty versus euro safety. Merkel (now on the lager) believes that the EU nations must give up some of their independence in order to guarantee the safety of the single currency: 'We need to change the treaties or create new treaties,' she says. But Sarkozy is determined to hang on to his national sovereignty - he faces an election early next year and is certain to lose power if the French people see him cede too much ground. The Chateauneuf du Pape flows and the French PM gets increasingly red-faced and shouty. Sarkozy will eventually agree to compromise, however. As beefy blood and red wine spill across the tablecloth, he will slump in defeat. There's too much at stake to cling stubbornly to an ideal. As Sarkozy himself admits: 'What will remain of Europe if the euro disappears? Nothing.'
Merkel: Black Forest Gateaux with iron filing sprinkles
Sarkozy: La galette des Rois, complete with his own face in icing sugar
Topic: Over the sweet, a bitter discussion on how to punish the eurozone nations that fail to meet targets and default. Sarkozy's knocking back the banana-flavoured Maxi-Muscle and admiring his sugary likeness, complete with crown. The ECB has ruled out the idea of creating eurobonds to help struggling EU sovereign nations. It has, however, begun buying up government bonds to try and prop up the market. However, if there is no resolution to the eurozone crisis by Friday's crucial EU Summit, over-leveraged countries may find themselves booted out of the EU. Merkel lives up to her 'Iron Lady' moniker as she chows down on pudding, sparks flashing between he teeth.
Bon appetite. Or, as we’re all speaking German now, shall we say ‘Mahlzeit'?