It seems Germany is more overtly taking charge of the eurozone crisis and the markets like it. Chancellor Merkel says there are already dramatic changes under way to create a "fiscal union" in which there will be strict budgetary discipline agreed across eurozone states. It does mean "we need to change the treaties or create new treaties" according to the German leader.
France too agrees a new treaty is needed. Sarkozy today declared "France will push with Germany for a new European treaty refounding and rethinking the organisation of Europe". David Cameron had a meeting with Sarkozy earlier ahead of next week's summit of EU leaders - and this presents for him both good news economically and headaches politically. A strong response from Germany and France, and indications that this new political and economic structure for the eurozone will come with effective guarantees on things like Greek, Italian and Spanish debt, will steady the markets and be better for the British economy.
Stig Östlund
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