Tess Vigeland: The leaders of the three biggest economies in the eurozone met in the French city of Strasbourg today. The German chancellor and the French president held their first meeting with the new Italian prime minister. The three leaders are now under intense pressure to end the turmoil caused by the European debt crisis. They duly announced the bare bones of a new plan. But financial markets were not impressed. The euro fell following the announcement.
From the European Desk in London Stephen Beard has more.
Stephen Beard: The leaders say they are planning to change the treaties that govern the way the European Union is run. No details yet, but it's believed the idea is to force the 17 countries that use the euro to abide by strict budgetary rules and not run up big deficits.
Critics were quick to point out: This would not deal with the immediate crisis. Megan Greene of Roubini Global Economics:
Megan Greene: We need them to take actual measures in the next few weeks or months. It could take about a year for a treaty change to be agreed.
Financial markets are pushing for a much quicker solution -- for the European Central Bank to behave as the Federal Reserve has and print money to buy large amounts of government bonds. But Germany, Europe's economic superpower, opposes that -- fearing inflation.
Christian Schulz is with the Behrenberg Bank in London.
Christian Schulz: What we need in Europe is really a trigger for Germany to budge on its opposition towards ECB intervention.
And he says that could be if Italy slides towards default.
Schulz: And the ensuing market panic if that happens must trigger the intervention of the ECB.
In other words, he says, European politicians are so far behind the curve it's the markets that will bring the crisis to a climax and an eventual resolution.
In London, I'm Stephen Beard for Marketplace.