Euro zone crisis summit: the spinning begins


The flowers aren't Angela Merkel just yet. These are for a cabinet colleague's birthday. Merkel's laurels may be presented if the EU summit endorses her plans for rescuing the euro


Sean Gallup

At the press conference following their meeting Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy were deliberately vague about their agreed plan for saving the single currency.

Today came a significant leak giving some details of the plan from the office of Herman Von Rompuy, president of the European Council of Ministers. It calls for severe sanctions for countries that bust euro zone rules on budget deficits - not to exceed 3 percent of GDP - and debt - not to exceed 60 percent of GDP. Countries who break the rules would lose their voting rights on euro zone policy.

"Consideration could be given to use legislation to define minimum common features," Von Rompuy's paper asserts. The idea includes harmonizing pension reforms and social security systems.

Most interesting piece of spin is Von Rompuy's assertion that euro bonds should not be taken out of the equation.

Meanwhile the FT reports that a "senior German official" gave a briefing where he (assume it was a he) said Berlin is, "more pessimistic than a week ago."

Pessimism - or anxiety - is something that is creeping into the normally smooth facade of British Prime Minister David Cameron.

Britain is basically a non-participant in the search for a solution to the euro-zone crisis. It isn't part of the currency so it doesn't get much say in plans to rescue it - even though if the euro collapses the ensuing recession will take the British economy with it. (Actually, the British economy seems to be going into recession anyway. Manufacturing output dropped 0.7 percent, according to figures released today.)

Anyway Cameron's euro-sceptic backbenchers are spoiling for a fight over the EU and are making his life hell. He even got roughed up at Question Time today.

He is probably looking forward to the sleepless nights and dull, hard bargaining of the summit which starts tomorrow in Brussels.