But Merkel wants budgetary discipline uber alles:
German Chancellor Angela Merkel has said Europe is working towards setting up a "fiscal union", in a bid to resolve the eurozone's debt crisis.
She told the Bundestag that a new EU treaty was needed to set up such a union and impose budget discipline...
In her speech, Mrs Merkel promised "concrete steps towards a fiscal union" - in effect close integration of the tax-and-spend polices of individual eurozone countries, with Brussels imposing penalties on members that break the rules."We need budget discipline and an effective crisis management mechanism," she said. "So we need to change the treaties or create new treaties."
The German government has been pressing for changes to establish powers to veto national budgets in the eurozone that breach agreed rules.
If Merkel succeeds (and she has the clout of heading the major economy in the European Union powerhouse), then this will be a major leap forward in financial integration for the EU. Until now, political integration has far outstripped financial integration, and the Eurozone crisis is partly the result of this lopsided development.
The UK has been playing an unusual role, hopping and skipping along the sidelines, shouting advice but reluctant to become a fully-fledged member in the Eurozone. This half in-half out posture has not prevented British leaders from proffering advice (often disregarded by Merkel and Sarkozy):
Britain is concerned about the possible impact of a two-speed Europe, in which it could be left on the margins along with other countries outside the euro.
Merkel seems determined to make things happen as she wants them to happen, even if it means bypassing the whole EU through a deal just between the Eurozone members, as she has hinted:
And this talk of a two-speed Europe is worrying Cameron, who faces insistent pressure from Tory Luddites to hold a referendum on continued membership in the EU.
"So we need to change the treaties or create new treaties."