December 5th, 2011
08:54 PM GMT
London (CNN) - So Nicolas Sarkozy and Angela Merkel have come up with a plan to "save the euro" as the deadline counts down to the Friday summit.
Another plan. But this one is different. For the first time it attempts seriously to tackle the underlying problem and create a "fiscal compact" of better budgetary and management for the eurozone.
Each has got something. Merkel hasn't had to budge on single Eurobonds, Sarkozy has assurances that bond holders won't take further haircuts, which would have hurt French banks further.
And they both agree on automatic fines for miscreant eurozone countries. 'The will of France and Germany'
So we should all be off, singing merrily down the road to recovery, right?
Not so fast. This is the European Union we are talking about. They have to try to get treaty changes agreed by all 27 members, and since that may be too difficult they have suggested just the 17 of the zone.
Oh the UK, Denmark, Sweden and Poland will love being left out of that: Not!
There is no way this process won't get bogged down in the domestic politics of some individual countries.
The only possible hope is that the markets keep up the pressure. It has been the contagion to Italy, pushing rates over 7 percent (although they have now fallen back) along with Germany starting to feel the heat too, that has driven this bargain.
The architect of the euro, former European Commission President Jaques Delors, has admitted the currency was flawed from birth.
Now finally they are proposing the radical surgery needed to make it work better. We have to hope (and pray) that they don't drop the ball at this late stage. As Sarkozy said (again) we are running out of time. Quite.
P.S. Anyone who doubts that Europe is the global economic problem at the moment should look at the last set of U.S. data. Manufacturing rising, jobs being created, confidence starting to return and a bumper Black Thursday after Thanksgiving.
The U.S. is starting to get the wind behind its sails. Late, but it is starting. Europe is the one stuck in The Doldrums.
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