Dec. 9 is bittersweet for Europe: at a summit in Brussels, its leaders struck a deal that might save its beleaguered currency, euro — but at the expense of the European Union itself.
The deal could mark a turning point in the raging euro crisis if it convinces jittery markets that, by way of strict budget rules, member countries can claw their way out of debt woes. It is potentially historic, taking the continent deep into fiscal integration and union as the member states concede sovereignty on taxation and spending to a central authority.
The problem is the E.U. isn't heading into this adventure as one. Ten hours of tense talks failed to persuade U.K. Prime Minister David Cameron to sign up to the pact, and so the other 26 member states agreed to forge ahead on without Britain. Cameron argued that the planned deal would threaten key British interests, including its financial markets and the preeminence of the City of London as Europe's financial capital. And so he vetoed an amendment of the full Union treaty. Hence, the others had to take a different route to an agreement: the intergovernmental agreement they will hammer out by March will be written outside the E.U.'s legal framework.(See "Euro Treaty Takes Shape, But Without Britain.")