They argue that other EU nations offered Germany its promise of greater spending rectitude, as embodied by the fiscal treaty, in expectation this would give Merkel new room for maneuver in her homeland to expose Germany to more of the continent's debt liabilities.
"The French even under Sarkozy had great reservations about Merkel's focus on austerity, but they went along with it in the hope they could extract concessions in return. With Sarkozy gone, Germany will become increasingly isolated," Tilford said. "Germany will eventually weaken its position."
WILL MERKEL BUDGE?
There's no public sign of that. Analysts forecast this means the crisis will have to spread, and deepen in Spain and Italy, before policy shifts. They are confident it will, noting that Spain is still just starting to tackle the toxic property-based debts in its banking system, announcing this month it will nationalize the largest real-estate lender, Bankia. Spain, just like Ireland, spent a decade bingeing on the cheap credit that euro membership underpinned to inflate its housing market.
On Thursday, Merkel told Germany's lower house of parliament, the Bundestag, she would support growth only through "structural reform," jargon for boosting a nation's efficiency and competitiveness. Economists tend to emphasize that such long-term reforms, while laudable, offer little immediate impact on deficit reduction as the crisis requires.
"Growth through debt would throw us back to the beginning of the crisis, and that's why we haven't done it and won't do it," she said, dismissing eurobonds as a "supposed miracle cure."
But borrowing more doesn't necessarily mean more debt as Merkel asserts, any more than spending less ensures less debt. It's all about encouraging or deterring growth, which in turn boosts or lowers tax collections.
Tilford said he expects Germany eventually to support a loosening of the fiscal treaty's proposed rules on maximum deficits, so that countries with healthy credit ratings and an ability to borrow freely would have EU permission to pump extra money into job-creating, tax-generating projects as Hollande and others want. He also foresees German acceptance of eurobonds and a more aggressive role for the European Central Bank in taking direct responsibility for banks' toxic debts.
But Merkel's grassroots would need major persuading. A poll published Wednesday in the German magazine Stern found 59 percent of Germans reject the idea of borrowing more to stimulate growth, while 61 percent called for Merkel to hold her ground. The poll had a 3-point margin of error.
All these issues will be debated at the next European Union summit May 23, Hollande's first. It's not known who will represent Greece, where most voters now back anti-austerity parties and no new governing coalition has emerged, making another early election likely.
Europe's political turmoil is complicating the Irish government's campaign this month to secure a majority "yes" for the treaty, which it has branded "The Stability Treaty." Prime Minister Enda Kenny emphasizes that Ireland must accept it to ensure future access to EU bailout loans.
But many on the left and right alike argue the referendum should be delayed until the autumn, to see whether other countries continue to ratify the treaty through their parliaments or a new, growth-emphasizing treaty emerges in coming months of EU summitry.
"With (Hollande's) election, an enormous argument about the right balance between fiscal responsibility and the need for growth is just beginning," said Fintan O'Toole, an influential Irish author and commentator. "Carrying on with a referendum as if none of this was happening is a classic case of fighting the last war."
Sinn Fein, the Irish nationalist party leading the anti-treaty campaign, wants the vote to go ahead May 31 because it smells political blood.
Sinn Fein has branded it "The Austerity Treaty" and takes inspiration from the fact that Ireland's voters initially rejected the EU's previous two treaties in 2001 and 2008. The Irish governments of the day overturned those results by staging second referendums, but Kenny has ruled out that option this time.