Tomorrow is supposed to be the date for the summit of European leaders. Everyone expects an announcement about what they are going to do to solve the debt crisis. But the nearer the date approaches, the more disagreement there seems to be. Today the finance ministers were supposed to meet. The meeting was cancelled.
There seems to be no agreement about any issue — the scope of leveraging the bailout fund, the size of the fund, the size of the haircut for Greek bond holders, and the size of the bank recapitalization. Merkel is back tracking because of the ruling of the German Supreme Court that said she had to consult Parliament. She now says that the ECB should not go on buying the bonds of Italy and Spain.
Perhaps Merkel and Sarkozy will have to agree to disagree.