For those too busy to read and interpret the official statements, the outcome of the European Council and the euro area statement have been simplified into this graph:
Economic governance in graphs (European Commission, Europe 2020)
Let me be clear about this: The summit(s) do not sort out the fundamental weaknesses of the euro currency (economic union).
The common European currency, the euro, needs a sovereign. In the Western political tradition of democracy and fundamental rights, this sovereign must be based on the citizens to be legitimate and accountable (democracy), equipped with robust structures and sufficient powers, as well as providing good governance and transparency.
The European leaders have refused to even broach the fundamental issues.
As a result of the British block to progress, the disciplinarian and intergovernmental ”fiscal compact” is harder to manage, but it also fails to address the need for the European Central Bank to act as a lender of last resort, of eurobonds to mutualise debt and of a real federal budget.
With glee, many enemies of European integration (in the UK) point to the failings and predict the rapid crash of the euro.
Given the consequences globally, I would not be as merry, but more important is how the steps taken will be interpreted by the markets and citizens in Europe and globally.
My interpretation is that the arrangement, contorted as it is, marks a step forward. There is now more resolve in the eurozone and in the European Union generally to advance. Despite looming downgrades of member states, the EU and European banks, the EU and the ECB may eventually progress in face of the strong headwinds.
The beginning recession is not going to make matters easier, but the leaders and citizens in Europe realise that we are in this together.
We do not know if it is going to be enough, but it is still more than nothing.
Since the resolve of Winston Churchill has been much in evidence lately, let me conclude with a quote (1942):
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.