Painful progress as Europe inches closer to debt deal

BARGAIN: The concern remains at the highest levels that the package to be agreed will be too small to do the business

AFTER A weekend of hectic, non-stop political action, Europe is making painful progress towards a big new deal to settle the debt crisis. D-Day has been delayed until Wednesday and there is still no telling whether the bargain will be enough.

The mood is as uncertain as ever. As the all-hands-on-deck effort intensifies, the concern remains at the highest levels that the package will be too small to do the business definitively. We’re talking trillions now, hundreds of billions of euro being insufficient, but few believe an end to the ordeal is in sight.

The Greeks are gloomy, the furrowed brows of EU officials betray a certain sense of dread, the Germans are still trying to calm everyone down and the French are winding up the tension. Everyone is exhausted.

There’s miles and miles still to go, and the tension is showing. “The chancellor is responsible for Germany, I am responsible for France and yet both of us today have to take decisions for countries which we are not responsible for, for which we are not heads of state or government,” French president Nicolas Sarkozy told reporters.

“That might also raise a certain number of democratic issues. By this I mean that there are not simply technical and financial issues at stake.

“These are countries which are facing much suffering, where are demonstrations, where there are deep social rifts. Our terms of reference are not to run these countries and yet we are being asked to take massive decisions that will affect them.”

Welcome to the new European order. Daunting moves loom, the glaring threat of contagion hangs over the euro, the sense lingers that political leaders are barely in control. In bar of the Hotel Amigo late on Saturday night, Angela Merkel was seen sipping white wine with officials. It was a moment of rare respite.

The chancellor and Mr Sarkozy met on Saturday evening with European Council president Herman Van Rompuy, IMF managing director Christine Lagarde, EU Commission chief José Manuel Barroso and Luxembourg prime minister Jean-Claude Juncker, chief of the euro zone finance ministers.

In Brussels late last night, the pre-eminent powers in the euro zone were still talking. The leaders of the 27 EU countries met at 10am. The euro zone summit didn’t start until 6pm. It was the same all weekend, the action moving from one long inconclusive meeting to the next.

Euro zone finance ministers met for more than six hours of talks on Greece on Friday night. German minister Wolfgang Schäuble gave a rousing speech about the ministers’ responsibility in Europe’s hour of peril.

At 9am on Saturday, the ministers returned to the crucible with their non-euro counterparts. That meeting continued until tea time, at which point the conclave of euro zone ministers resumed their deliberations. Another couple of hours passed before they broke up for the night.

There were precious few details, but such news that did emerge from the room suggested it was proving difficult to achieve progress. A collective decision was taken to say nothing officially, and nothing was said. Anyone who spoke publicly did so in vague, imprecise terms.

At a separate meeting on Saturday afternoon, German foreign minister Guido Westerwelle urged ministers for Europe to change the EU treaty to reinforce economic governance in the euro zone. This met with little enthusiasm, prompting Westerwelle to retort that the markets were crying out for treaty change.

Au contraire, say most non-Germans. What the markets want is clarity over the rescue package. This will be a while coming yet. Although France has stepped back from its demand for European Central Bank involvement in the leveraging of the bailout fund, deep divisions remain over the expansion of the fund’s remit and the looming Greek default.

By Saturday night, the ministers handed over to European leaders. The action moved briefly from the European zone in downtown Brussels to meeting of centre-right leaders just outside Meise. Enda Kenny was expected in the Chateau Meise in the grounds of Belgian national botanical gardens. He never arrived in the end, but there is no shortage of time for talk.

Will the final deal be enough? Soon we will know.