Saving the eurozone has come down to two countries, France and Germany. President Sarkozy and Chancellor Merkel are meeting today to try and craft a common proposal to save the eurozone and the EU,but their differences are fairly wide.
The Germans are desperate to preserve the eurozone because their economy depends on exports, and returning to the Deutschmark would create a rise in the prices of German products. On the other hand, German taxpayers are fed up with costly bailouts.
Merkel wants a 'federalized' eurozone to enforce budget discipline and to have euro zone states surrender the control of their budgets to a European authority with veto power and the ability to punish governments that step out of line.
France opposes this, and Sarkozy, with only five months to go before elections, is taking major criticism from his political opposition and the press over handing French sovereignty to unelected EU officials.
At that, a proposal along the lines of what the Germans want might necessitate a change in the EU treaty.
It'll be interesting to see what they come up with.
Meanwhile, Italy has joined Greece, Spain, Ireland and Portugal as another country whose debt is out of control and may need an EU bailout.
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