For the first time in years, following this week's European summit in Brussels Angela Merkel has returned to Germany defeated - with the newspapers saying she has been 'blackmailed' and suffered an 'evil setback'.

By Allan Hall, Berlin
12:54PM BST 30 Jun 2012

Der Spiegel magazine said: "German Chancellor Angela Merkel rarely sees these kinds of negative headlines when returning from European Union summits. During her over six years as the head of Germany's government, she has usually been able to put a positive spin on even unpopular compromises.

"But at the most recent emergency gathering of European heads of state and government, which was held in Brussels and lasted until the wee hours of Friday morning, she had a hard time doing exactly that.

"Reactions back home were devastating, and there were even calls for pushing back key parliamentary votes on the permanent euro bail-out fund, known as the European Stability Mechanism (ESM), as well as Merkel's fiscal pact scheduled for Friday evening. In fact, the vehemence of the attacks seems to have taken even Merkel's advisers by surprise.

"This is not the first time that Merkel has surrendered what had been repeatedly heralded as Germany's final line in the sand. Every step of the campaign to rescue the euro over the last two years has gone from being a taboo to a done-deal that triggers massive public outrage. Indeed, one could even go further and say that the entire history of European integration has been a series of broken taboos.

"On the whole, the summit was a victory for the southern European countries. The summit's decisions will reduce the IMF's influence in Europe and give the European Commission a leading role in supervising reform efforts. One thing is clear: IMF officials will not seize control in Rome or Madrid. Since the beginning of the euro crisis, this possibility has been a thorn in the side of Mediterranean countries.
"Merkel, on the other hand, always wanted IMF participation because she doesn't believe that EU monitors will be as ruthless."

"Merkel's evil setback in Brussels," said popular daily tabloid Bild.

"Already, early on Friday morning, the media coverage was very bitter for the Chancellor Merkel caved in was the general tenor.

"She again achieved a major victory in euro policy. But nothing more!

"Merkel must further tremble: multiple constitutional complaints against the decisions are announced. It means: now the Federal Constitutional Court in Karlsruhe is on the case."

Taggesspiegel, Berlin's centre-left daily, said; "Eurobonds are not being introduced swiftly into Europe. But for Chancellor Merkel the summit was a bitter defeat. It is a defeat for the Chancellor, and no pretty talk disguises it. But it is a failure that at once helps the euro zone – and thus, at the end, Germany as a great euro profiteer.

"The Summit gave the signal that Europe's leadership further wants to deal in the next few months with the question of how the euro, at some point, gets the foundation with a fiscal union that it so desperately needs. For Angela Merkel, who is one of the supporters of a political deepening of the single currency, this means: after the game is the same as before the game began."

"Blackmailed," said Die Welt.

"More money, less reform: Angela Merkel sacrificed more red lines at the EU Summit. The night of the long knives in Brussels will go down in history as the night Germany largely stopped its efforts to force reforms on the problem countries of the euro zone.

"German Chancellor Angela Merkel has given one last red line was: no money without verifiable consideration. Italy and Spain are can retrieve resources from the Stability Fund in the future, without having to promise reforms in turn.

"In the best case, the long night of Brussels can help keep Italy and Spain in their debt spiral. At the same time, the likelihood declined that this would help these countries in the long run. And that means only postponing the crisis rather than solving it."

http://www.telegraph.co.uk/news/worldnews/europe/germany/9366675/EU-Summit-How-Germany-reacted-to-Merkels-defeat.html