And so we wait.
Today’s EU summit in Brussels produced little in tangible results. But after a gloomy morning, European Council Chairman Herman Van Rompuy and European Commission President Jose Manuel Barroso ended the day with a remarkably optimistic press conference.
“Work is in progress and progressing well,” Barosso told reporters.
The pair told reporters that leaders have already “outlined [a] strategy” for quelling the economic crisis, and will make final decisions on the general plan “within the next 72 hours.”
Here are the 5 issues that will form the crux of the plan we’ll (hopefully) see on Wednesday:
– Measures to enhance debt sustainability and growth across the European Union.
– A “new program for Greece.”
– Creation of a “sufficient firewall against contagion.” They said the new plan aims to expand the EFSF’s resources without expanding the obligations of member states. Barroso and van Rompuy said several options are still being considered, but that they will have more answers on Wednesday.
– A “coordinated scheme to recaplitalize the banks.”
– A plan to increase fiscal integration in the eurozone. They noted that they entertained both short- and long-term goals.
Barosso and Van Rompuy also shed light on what might very well be the two most important issues holding back a plan right now.
– EU leaders think Italian PM Silvio Berlusconi must do more to get Italy’s finances under control. Rompuy noted that certain EU leaders will have to “convince their colleagues to make necessary commitments” by Wednesday, suggesting that a new round of austerity measures will be expected from Rome.
– Secondly, they bought into a feud escalating between euro and non-euro EU nations, minimising the importance of subjects discussed by the 27 leaders of all EU nations this morning — at least in comparison with those discussed by the 17 eurozone leaders later in the day. Furthermore, they named changes to EU governance (perhaps including treaty changes) as some of the most important progress made all day. This will not make non-euro EU countries happy.
Lastly, they advocated further capitalisation of the IMF, implying that the fund lacks funds to actually help out in this crisis. This is likely to be a point of contention at the G20 meetings early next month.
For all appearances, the disagreement between French President Nicolas Sarkozy and German Chancellor Angela Merkel over whether or not to use the European Central Bank to recapitalize the banks looks closed. Sarkozy admitted that his plan currently violates the terms of the EU constitution, but we could see him push hard for a change to those rules in the future.
Van Rompuy briefly revived these hopes, when he told reporters that “saying the ECB is not involved in anything [in the current plan] is too much to say.” It would be unwise, however, to make too much of this statement, considering Sarkozy’s statements.
More news should be spilling out of Europe on the details of EU leaders’ plans ahead of the second big summit of EU leaders on Wednesday evening.
If Rompuy and Barosso’s presser was any indication, eurozone leaders have a decent sense of what to do to fix short-term problems in the short term (perhaps with the notable exception of Italy’s Berlusconi) but now might face pressure from the 10 non-euro states of the EU. Because all we need now is more political jousting.