ANGELA Merkel cut an increasingly isolated figure in Europe tonight as the rest of the continent ganged up on Germany over its imposition of crippling austerity.
Major EU nations including France, Italy and Spain are clubbing together to form a new alliance with the aim of wrestling back economic power from the German leader.
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The new group is being fronted by Greek PM Alexis Tsipras
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It has been prompted by huge economic stagnation in southern Europe
Mediterranean economies have been devastated by an EU-wide policy of austerity enforced from Berlin, which has led to massive youth unemployment and soaring poverty.
Fiscally conservative Germany, which is the EU’s largest economy, is reluctant to loosen the purse strings and authorise the huge injection of cash many other member states need to kickstart their fortunes.
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But policies which have benefited German industry and exports have caused economic oblivion in many parts of southern Europe, and now the rest of the continent seems to have had enough.
The leaders of France, Italy, Spain, Portugal, Cyprus and Malta are planning to meet in Athens next month to forge a new anti-austerity alliance with the aim of wrestling back control of the European Central Back (ECB), which sets Eurozone fiscal policy, from Berlin.
It is being headed up by Greek premier Alexis Tsipras, who has frequently clashed with both Mrs Merkel and Brussels over the crippling austerity which has brought his country to its knees.
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Preliminary discussions on how to outmanoeuvre the all-powerful German leader had already taken place, with Mr Tsipras and his Italian counterpart Matteo Renzi having held informal talks about the possibility of setting up an “Alliance of Europe’s South” on the sidelines of June’s EU summit.
The leaders want the group to push for a pro-growth agenda and will now hold their first meeting in the Greek capital on September 9, according to the Athens News Agency.
During the talks they will focus on the “common” challenges facing southern EU countries on an economic, political and institutional level and particularly on austerity, fiscal discipline and migration.
Mr Tsipras is looking to spearhead a relaxation of crippling austerity and the introduction of more “flexibility” into EU budget surplus requirements set by Brussels.
The participation of France - traditionally seen as the EU’s second most powerful member - will lend huge weight to the project and may make it difficult for Mrs Merkel to continue to resist calls to loosen the purse strings.
Countries such as France, Italy, Greece, Spain, and Portugal face similar challengesFrench social democrat MEP Gilles Pargneaux
The French economy has been in the doldrums for years, suffering from sluggish production and growth, and president Francois Hollande has indicated he would like to see an end to EU austerity.
But any move to unleash massive spending to kickstart southern European economies could prove very unpopular with German voters, who would ultimately be required to foot the bill.
Pressure is now growing from across the continent though. In April, Mr Tsipras and the Portuguese premier Antonia Costa signed a joint declaration claiming that EU austerity-driven policies are “wrong”.
The two left-leaning leaders said that “austerity policies are keeping economies depressed and societies divided” as they upped their rhetoric against German fiscal conservatism.
It is believed the recent Brexit vote has accelerated the plans for an alliance with French social democrat MEP Gilles Pargneaux saying it had made politicians “rethink the way we do things in Europe”.
He told Euractiv: “Countries such as France, Italy, Greece, Spain, and Portugal face similar challenges - migration, security, proximity of an unstable neighborhood…issues that justify enhanced cooperation between them.”
On France’s relationship with Germany he offered a coded rebuke to Berlin, saying that while it was “essential” Paris must also be prepared to “assume its contradictions where they exist”.
Italy’s economy has been in the doldrums from years and is the same size now as it was when the Euro was first introduced more than 15 years ago.
The country is facing a resurgent far-right and a crippling banking crisis, with standards of living falling and unemployment rocketing.
Meanwhile in Portugal and Spain joblessness amongst the young has reached epidemic levels with both countries backing anti-austerity parties in recent elections.
