Is the Deauville Agreement half dead? Hopefully!

So our enlightened leaders have met in Brussels to discuss a number of issues, first among which, economic governance and I must say that the result is looking mighty good, and very much along the lines of what I had hoped for.

Everyone was reporting with various levels of detail on what seemsto have been a Council meeting dominated by discussions of the Deauville Agreement. This was a joint call by France and Germany to introduce two EU treaty changes.

First, one empowering a majority of the council to withdraw votes from member states not complying with the SGP3 (opinions the SGP3 here).

The second change was proposed to facilitate the establishment of an alternative mechanism to the EFSF in order to deal with sovereign debt crises. This is because Germany fears that its Constitutional Court may consider any permanent version of the EFSF to be unconstitutional in the absence of a EU treaty revision. It is also motivated by the fear of a German negative public opinion who bears a large part of the weight of the bail out fund.

However, the shape of this mechanism was not very clear. It could have involve d the creation of a permanent fund and the creation of a proces for orderly debt restructure; or only the latter. Fortunately, the comments to the press from the President of the Council of the EU confirm that it is both.

It seems that the main points of contention were the appropriateness of withdrawing voting rights and whether there is an actual need for treaty change.
To be quite fair the first proposal faced overwhelming opposition in the media(Der Spiegel, the FT. ) from the Commission (Barroso and Reding, but not Oli Rehn) the European liberal and leftist leaders

On this issue I must admit that I am impressed at the strength with which the Commission opposed those two countries. Barroso's words could not have been clearer. Moreover,centre-left governments are also in opposition, as are some liberals and most likely the UK's Cameron and Sweden's Reinfeldt.

This means that it was possible to focus more attention on the second issue, of appropriate mechanisms for dealing with sovereign debt crises. Apparently the Finns had a neat little idea, where

Thus the conclusion is that the biggest losers so far are France and Germany. They postured before and came out half empty. It was still better than the rest. At least they got to shape the agenda. France however seems like the biggest loser. It flip-flopped on an extremely unpopular measure only to see it being opposed by all of it's EU partners. Moreover, Sarkozy's reaction to Vivianne Reding's comment made him look even more petty. You don't hear this kind of comments from Merkel...
France has known better EU days.