Well, well, well. That was quite a speech. On Monday evening, Polish Foreign Minister Radek Sikorski went to Berlin, the eurozone’s lion’s den as it were, and told it like he sees it.

Before an audience at the Deutsche Gesellschaft für Auswärtige Politik, including his counterpart “Dear Guido” (Westerwelle), Sikorski rebuked Germany on several fronts:

For not admitting it is the “biggest beneficiary” of the current set-up; for allowing the narrative about others’ profligacy to run unchecked; and for not being more self-critical about the role of German banks which “recklessly bought risky bonds.”

The greatest threat to Poland’s prosperity is not terrorism, the Taliban or German tanks, or “even” Russian missiles but the “collapse of the eurozone,” said Sikorski.

“Because of your size and history you have a special responsibility to preserve peace and democracy on the Continent.”

Sikorski is tapping into what has regularly been alluded to in newspaper columns  and muttered obliquely in national capitals but he is the first politician to challenge Germany so directly.

There are not many countries that can do that, and in these terms, at the moment. France, the weaker partner in the Franco-German duo, could not. Spain and Italy also in trouble economically could not. The UK, for all sorts of historical as well as current europolitical reasons, could not.

Small countries could, but risk looking silly. The leftover list is short. Poland can because it is a big country, a neighbour, and its economy is doing relatively well. And it could use the historical references it did precisely because of the history the two countries share.

Germany’s vision of Europe is prevailing at the moment. It is pushing ahead with changes that will see much greater fiscal discipline in Europe, if possible enshrined in a reworked treaty.

This is understandable.

It wants to prevent a Greece-type situation, where a country fiddles the accounting books, from ever happening again. Other EU countries are more or less willing to go along with Berlin’s view.

But there has been much grumbling on the way. There is no great appetite for treaty change. There are concerns about centralising budgetary oversight at the EU level without some sort of democratic payoff. And, mostly, there are real fears that Germany is prevaricating too long over side issues, while the crisis itself deepens with huge social costs to many European citizens.

It can very well be seen as glib to pull the ‘War’ reference as a way of defending the European Union. A speech given by Jacek Rostowski (Polish finance minister) in the European Parliament earlier this autumn came across as hollow scaremongering.

On the other hand, the glue that holds societies together, even long-peaceful and relatively prosperous ones, is thin.

It does not take too many pressures for them to come unstuck. At the very least, this could lead to a rise in nationalist and populist parties around Europe (such parties are already on rise) and economic nationalism.

German political discourse has been dominated by fears of how much any eurozone-saving solution – such as eurobonds – will cost the German taxpayer. It is good to have this domestic discussion rudely interrupted every now and then with some pointed (and public) criticism from friends. After all, the fate of the entire eurozone lies in Chancellor Merkel’s hands. This is not  just about German taxpayers. It is about all the EU’s citizens.

Is it possible to have a fiscal discipline union before a political union? On Wednesday the European Commission is going to unveil proposals to vastly extend its budgetary oversight powers.

The move is part of an attempt to make budgetary surveillance so tight, and therefore the likelihood of a euro state fiscally misbehaving so slim, that Germany will ultimately be persuaded to sign up to the idea of mutualising eurozone debt.

According to a report in the Financial Times,  the proposals include EU approval of all 17 eurozone budgets and the possibility of putting a country that is in trouble “under some form of administration” by EU authorities.

The draft proposals also suggest that the commission could ask governments to change policy decisions if they are seen as pushing the country concerned into excessive debt.

“If we want a common currency, we have also to share some discipline. In a monetary union we need to acknowledge this kind of interdependence,” Commission President Barroso said Wednesday afternoon, standing alongside Mario Monti, the new leader of Italy.

The significance of such steps is not to be under-estimated.

Of course, the proposals are a result of the ever worsening eurozone crisis. And we are where we are with the crisis, which is to say politicians are rushing to patch up the shaky foundations underpinning the euro. And they are being hounded by disbelieving markets all the way.

Once content to treat German and Greek debt as equal, markets have now become ueber-sceptics. And nothing short of a complete fiscal union will do. EU politicians have in the past said they will do everything it takes to save the euro. Before going on to do as little as possible to get themselves through the particular crisis summit of the moment.

This is a reflection of the vast and complicated nature of the problem as well as the different visions that EU leaders have of what “everything it takes” actually means.

So far it is translating into more power for Brussels.

“We need strong institutions with the power to act,” says Barroso. But will the institutions be stronger without political accountability?

I reckon we need to go the whole way. The budgetary oversight needs to be accompanied by a thorough reform of the EU’s political set up. It could be along the lines of what Finnish Europe minister Alexander Stubb and German Chancellor Angela Merkel’s CDU party suggested last week. So, a president of the European council and commission rolled into one, directly elected, a bi-cameral system with the parliament and the council of ministers, with the right to propose legislation. A parliament with representation reflecting the size of the member states.

During the press conference with Monti on Wednesday, Barroso repeated that the advantage of giving the commission more powers is that it is above politics.

“After the the Second World War, the countries that founded the European community created supranational institutions, and now we have the European Commission, the European Court of Justice and the ECB. Why? Precisely to have independent assessment and monitoring and also if possible independent enforcement mechanisms that are not subject to political manoeuvring.”

Given the kind of powers the EU has now and will soon get in the future, this trend towards validating technocratese is unhealthy. The EU needs more politics not less.

Dipping in to listen to the European Parliament debate on economic governance on Wednesday, I happened to catch Nigel Farage just as he was about to speak.

A strident eurosceptic, good at public speaking and flinging insults, the Briton’s time on the floor ran true to form. A good underlying point or two was somewhere to be found, but these were thoroughly debased by the tone and content of the rest speech. So far, so typically Farage.

But even Farage, who likes to play up to a maverick “tell it like it is” image, was sailing particularly close to the wind on Wednesday. Speaking about the eurozone crisis (as if anyone speaks of anything else these days), he said:

 “In to this vacuum has stepped, albeit reluctantly, Angela Merkel and we are now living in a German-dominated Europe, something that the European project was supposed to stop, something that those that went before us actually paid a heavy price in blood to prevent. I don’t want to live in a German-dominated Europe.”

 Anti-German feeling runs close to the surface in Britain. It does not take much to spark it off.

So it is unusually awkward when there are political tensions between the two countries – as there are now. They are tussling over ( specifically) a financial transaction tax, which Britain doesn’t want, and (broadly) over how constructive London should be in building a future more integrated Europe, pushed by Berlin.

The leaders come from radically different standpoints. German Chancellor Angela Merkel’s CDU party has just signed off a blueprint for a highly integrated EU, with the corresponding reduction in national powers. David Cameron’s Conservatives are agitating to use a pending EU treaty change to win significant powers back from the EU.

Cameron knows – having been told in no uncertain terms -that he cannot approach the treaty negotiating table with too high demands. The 17 eurozone countries could go it alone, Berlin warned during October’s summit.

In truth, it seems to be a devil’s balance. Cameron doesn’t want the 17 making rules that will affect the internal market. Merkel would really rather have all 27 countries on board. So each of them – pragmatic leaders both – has some cards in the hand.

But backbenchers, and newspapers (in Britain, notoriously jingoistic) are shriller. Volker Kauder, parliamentary leader of the CDU, said it was unacceptable that the London is “only defending its own interests.”

And, later on, dropping a beautifully-bound gift into the Daily Mail’s lap, he said: “Suddenly German is being spoken in Europe.”(Daily Mail headline: Europe Speaks German now! ) Farage’s rhetoric in the European Parliament was simply an extension of this.

Cameron will hold talks with Merkel in Berlin on Friday. It will be interesting to see how they handle their differences in public.

There is much riding on it.

Germany is now clearly running the show in Europe. The more politically acceptable fact of a Franco-German duo leading Europe has been exposed as a lie by the crisis. France is as dependent on Chancellor Merkel’s decisions as much of the rest of Europe.

This change in the order of things, exacerbated by this apparently never-ending crisis, brings all kinds of resentments to the surface. Big countries versus small countries. Euro ins versus Euro outs. North versus South.  And anti-German sentiment.  (Greek tabloids recently dubbed the office of Horst Reichenbach, heading up an EU assistance team in Greece, the new “Gestapo” headquarters.)

The EU has never felt less like a union and more like a fragile grouping of national states than today. So statements and differences between EU leaders are taking on a greater resonance than ever – as are meetings between British and German leaders.

It seems perverse to be wondering about possible new EU member states just now.

But others were doing just that in the European Parliament on Wednesday. Regionalists, devolutionists and soft nationalists – of academic and politic bent – gathered to discuss “The revival of nations in a context of economic turbulences”.

(A provocative enough title when you think of how the austerity drive, low growth and rising unemployment across Europe risks provoking populism and nationalism. But still. ).

This was not about letting countries as yet outside the EU in. But about creating new little countries within the EU. And then letting these new entities in.

That little can of worms.

Scotland is the poster child for the ‘internal EU enlargement’ movement. Its independence party, the Scottish National Party, won an outright majority for the first time this year. It is set to seek a referendum on independence in the latter part of its five-year mandate.

Participants in Wednesday’s conference were shown stirring clips of SNP leader Alex Salmond’s rhetoric (“No politicians, and certainly no London politician, shall determine the fate of the Scottish nation”. And more of the like.)

The SNP is already looking into how it would go about EU membership. Only one thing is clear. Well perhaps two. It is not an automatic process. And it will be politically very difficult.

Although Alfonso Gonalez, an EU law lecturer at Rovira i Virgili University, reckoned that the EU “would have to say Yes” to  Scotland (or Wales, Catalonia, the Basque Country and Flanders ….) because if not it would be violating the democratic principles of the EU.

The “most serious problem” would be the composition of the European Parliament, he suggested. One might also add whether it will join the euro (and therefore contribute to EU bailout funds) how much it will pay into the EU budget. I can’t see Spain rushing to endorse its membership either.

The steps according to Gonzalez would be:

- Notification of the succession of the new state to the EU

- Recognition of the state by the EU

- Amending the existing treaties

The conference, with a backdrop of regional flags,  also saw Marta Rovira, secretary-general of the Catalan ERC, put the case for her nation to become an EU member. Rafael Larreina, from the Basque Amaiur (Eusko Alkartasuna) separatist coalition, spoke of Spain’s economic woes and said that the Basque country would be better off independent.

*Bart De Wever, head of the separatist New Flemish Alliance N-VA and winner of Belgium’s June 2010 elections (though no longer among the those parties hoping to form a federal government but that is a whole separate issue) believes that traditional states are on the way out. This is a slow process rather than a “revolution”.

Having ceded much of what belongs to statehood to the EU – a national currency, economic policy, some foreign policy –  states have “lost their monopoly on sovereignty.”

He and others argued that smaller states were better because they are less likely to be eurosceptical and more efficient at taking decisions – although I had the distinct impression in De Wever’s case, with his talk of “the costs of heterogeneity”,  that it meant smaller nations containing only similar-thinking people.

Indeed, many arguments felt like an inward-looking case for protecting one’s own.

“Internal enlargement” is not an issue that faces the EU yet but it may be on the not too distant horizon. What is on the immediate horizon though, and something that was also raised by the conference, was the ever-widening gap between EU decision-makers and EU citizens.

Some saw it as an opportunity for regions to get more power. Jill Evans, a Welsh MEP, said that the crisis was “prompting serious thinking about restructuring of Europe.”

She meant taking decisions closer to the people and involving regions more. But if nothing is done to correct the gap – which the European Parliament is manifestly unable to fill – her benign suggestions may be overtaken by angry citizens, many subject to harsh austerity measures, who feel that their voices are not being heard.

*(Belgium – it should be said is a special case. If it does split as De Wever hopes and assumes it will – “Belgium is doomed” he stated on Wednesday – then it would mean that the EU would lose an entire member state. In addition, the internal discourse about richer “hard-working” Flemings being obliged to subsidise poorer “lazy” Walloons is uncomfortably close to the stereotypes in the current eurozone debate on northern Europeans paying for lazy Greeks. If Belgium breaks up, what hope is there for the EU runs the question. Although these days, one might reasonably turn the question around).

Greek prime minister George Papandreou’s call for a referendum on the second bailout package for his country was a shock. By some accounts, not even finance minister Evangelos Venizelos knew about it.

EU politicians and markets have reacted with consternation.

It is undoubtedly inconvenient. A referendum adds more uncertainty to an already perilously uncertain situation. It could put the sixth and seventh tranches of aid to Greece, due this month and next, into doubt. Not holding the referendum until January – as has been mooted – seems perversely far away.

Other eurozone members are already asking why they should bother trying to work out and approve the highly complicated second bailout package agreed by EU leaders only last Thursday.And calling on China for help with the eurozone bailout fund (EFSF) will now be a whole lot more difficult.

But the general reaction to the referendum announcement has been far more illustrative of current state of affairs in Europe than the actual announcement.

Papandreou has been summoned to meet the leaders of France and Germany on Wednesday afternoon to do some explaining.

There seems to be two main strands of criticism. The first is that he cannot do this because the markets won’t like it. The second is that he cannot do this because it goes against Article 4 of the EU treaty.

The first argument yet again raises the question of how far the balance between politics and the markets can further go out of kilter. Politicians have been dancing to the tune of the ‘markets’ for two years now.  Bankers attended both the 21 July and 26 October summits of eurozone leaders in order to shape the final deal. And shape it they did. They hold most of the cards.

Politicians are running to catch up. A useful illustration: Since Papandreou made the referendum announcement, myriad analysts from banks, ratings agencies and other financial institutions have been asked their opinion. Why is it that their opinion should be of any consequence on whether Greeks should be allowed to vote on their future?

As for Article 4, it states:

‘The Member States shall facilitate the achievement of the Union’s tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives’

Using this article as a pull-out-of-the-hat trump card only serves to underline the distance between those that make the decisions in Brussels and those that feel the effects of those decisions.

Look at the situation in Greece now. Statistics released Monday show unemployment is at 17.6 percent. Ordinary Greeks are suffering immensely through swingeing public sector cuts. State assets are being sold off to pay the country’s debt. There is to be an international team on the ground permanently, possibly until the end of this decade, to make sure Greece holds to its austerity promises in return for aid. Life for Greeks is not going to get better soon. This downward spiral of austerity will continue.

Papandreou himself has revealed little of his reasoning behind the move.

“We trust citizens, we believe in their judgment, we believe in their decision,” he said in parliament on Monday “In a few weeks the [EU] agreement will be a new loan contract … We must spell out if we are accepting it or if we are rejecting it.”

On Tuesday evening he reportedly told ministers:

 “The referendum will be a clear mandate and strong message within and without Greece on our European course and our participation in the euro.”

 You might say Papandreou – for whatever reason – is injecting a little bit of democracy into the process. It’s messy. And the markets don’t like it. But are those good enough reasons to oppose it?

And yet

It may all be much ado about nothing.

Many questions remain open. It is not clear the prime minister will survive a confidence vote on Friday. If he doesn’t, the government will fall and this will have been just another jittery highpoint in two years replete with jittery highpoints. If Papandreou hangs on, the referendum proposal will have to be agreed by President Karolos Papoulias. That is also not a given.

( And then we have the referendum itself. The result will likely depend on the question put to the Greeks. If they are asked to endorse a second eurozone bailout package – promising further hardship and loss of national sovereignty – a No is likely.  If a broader question is posed, say on eurozone membership, the result is harder to call.)

(This blog was edited on Thursday at 11am CET to correct the name of the Greek president. His name is Karolos Papoulias and not Evangelos Venizelos as previously written.)

Could the 17 eurozone countries go it alone and write their own treaty? The idea came up briefly during the summit on Sunday. German chancellor Angela Merkel told David Cameron, UK prime minister, that if he did not allow the 17 euro member to integrate further they will go outside the treaties.

Observers of the meeting see it as more of an empty threat. A bit of sabre-rattling by Merkel to say ‘it’s not what I want…. but just over my shoulder sits Sarkozy who’s very keen on such a scenario’.

Merkel, it should be said, has been a staunch defender of doing as much at the EU 27 level as possible. A separate inter-governmental treaty would put a symbolic, political, institutional and legal brick wall between the euro ‘ins’ and ‘outs’. And would be the end of the EU as we know it.

Nevertheless, the idea is out there.  And technically it is possible. The Schengen Agreement, governing the EU’s borderless area, is an intergovernmental treaty.

But after the ‘in principle’ bit, it all gets a bit tricky. According to one diplomat who has many years of EU treaty business behind him, the 17 euro countries would not be able to do anything to alter the current treaties only add to them:

 Basically you cannot change the treaty and you cannot do anything that goes against the treaty. You can add to the treaty. 

 This would mean that Art. 126 – the key article on monetary union in the treaty which says that countries could avoid excessive deficits – could not be changed. And it is just this article that Germany wants to tighten up. But there is nothing to stop the 17 making an agreement around a “debt brake” (Schuldenbremse), for example

However, such treaty would also spell the end of reign of the European Commission and the so-called community method as it would inevitably imply new institutions and structures.

 This would also have consequences in terms of the community method and role of the institutions, but of course some would like to see this. For some [Read France]  this is an objective en soi. But that would be the price. Because you can’t do something for the 17 in a new treaty and take over the institutions of the 27.

 But while I am struggling to see the eurozone 17 push ahead with separate intergovernmental treaties, it seems an even bigger hurdle to contemplate yet another treaty change.

In an address to the Bundestag on Wednesday, Merkel again insisted that treaty change could be limited and quick. Where is written that treaty change needs to take ten years, she asked. (To which you might answer that it is written into European political DNA).

Here is the same EU diplomat when asked whether limited treaty change is possible:

The short answer is no. We had one [treaty change] on the ESM [European Stability Mechanism] but this was a tiny tiny technical thing and we could do it by the simplified Treaty procedure. What is being talked about cannot be done by simplified treaty procedure, it can only be done by the normal treaty procedure which involves a convention.

Which brings us back to what can be achieved with the current treaty. Quite lot it seems but not: eurobonds, taking fiscally misbehaving countries to the European Court of Justice or suspending voting rights. The commission is due to bring out a paper next month outlining what is possible under Lisbon rules, and specifically Art. 136, which details economic and budgetary measures for eurozone members.

European Council President Herman Van Rompuy has been tasked to do more or less the same thing. He will come up with a report in December.

Two footnotes

Having spoken to several diplomats, it is hard to exaggerate the lack of enthusiasm for treaty change. However, this is not reflected in the European Parliament where some see it as a marvellous opportunity for a big leap towards federal Europe. To which I offer this quite brilliant quote by a diplomat summing up the EU House.

The parliament is “full of solutions that are looking for problems to solve”.

And on Herman Van Rompuy himself. There seems to be general agreement that without his attention to detail and fair reflection of all the views in the council, the rift between the euro ins and outs would be much worse than it actually is.

It is a difficult task, but he is using his links with France and Germany to keep them on the same page as well as being very conscious of keeping all of them (EU leaders) on the same page. I think he has also been instrumental in making sure that what comes out in European council conclusions reflects the balance of the views of member states and not just those of one or two,” says one small-country diplomat.

It is for this reason that his appointment as head of the eurozone summits, in addition to being head of the European Council summits, was so uncontroversial.

When they don’t get on, it makes headlines all over Europe. When they do get on (albeit fleetingly), that makes headlines all over Europe, too. It seems to have been the “Merkozy smirk” that did it.

Sunday’s summit saw agreement to have no agreement until Wednesday; French President Sarkozy lash out at his British counterpart over euro membership and Sarkozy and Chancellor Merkel answer a question about their Italian counterpart Silvio Berlusconi.

During a joint press briefing after a meeting of the EU 27, all was proceeding as usual. Merkel was impassive and to the point. Sarkozy was effusive and hubristic. They were in the same room. But you wouldn’t have known it from the body language.

Then comes the Berlusconi question. Did the Italian leader make them any promises on his reform efforts and were they reassured by them?

Sarkozy smirked all the way through the question. Merkel looked straight ahead. When the question finished, there was a little pause. And then they both glanced at each other and grinned. It was quite a startling dropping of diplomatic mores. A member state can be considered a major pain. But rarely does it elicit a sort of shoulder-shrugging grin. At least not at this level.

Sarkozy stepped into the breach . “We were together in this meeting”, he said referring to a meeting on Sunday morning with Berlusconi. At that meeting, the Italian leader was read the riot act by both Paris and Berlin for the slow pace of reform.

Sarkozy said he had confidence in the Italian system to see through the reforms. Merkel said it was a meeting of “friends” but noted that “trust” needs a clear perspective.

Ultimately the smile spoke louder than the words though. There has been a large outcry in Italy over what is being seen as the international humiliation of their leader – though it has to be said he has been active in this respect for quite some time.

The clip of Sarkozy and Merkel sharing a complicit oh-well-you-know-Belusconi grin is on all newspaper sites.

Foreign minister Franco Frattini said the gesture and expressions of Sarkozy were inappropriate.

“No one is allowed to ridicule Italy” even if it is dragging its feet in facing the crisis, said Pier Ferdinando Casini, leader of the opposition UDC, on his blog. “I did not like Sarkozy’s sarcastic smile.”

 Il Giornale said Sarkozy’s smile was like the headbutt given by France’s Zinedine Zidane to Italian footballer Marco Matterazzi in the 2006 World Cup final.

 I am not sure why the Sarkozy half of the smile attracted so much anger. It said a lot more that Merkel, normally discreet and frosty, joined in too.

Going beyond ‘that smirk’ though, rarely has a member state – and a founding one and euro member at that – been so openly and strongly criticised at this level.

Herman Van Rompuy, EU council president, reinforced the point later at press conference. “Certain countries”, he said, had to make “commitments” by Wednesday, the next time eurozone countries meet. He was asked what would happen if they didn’t. “They will make commitments” he replied.

The anger reflects frustration at the fact that while all these efforts are being made to shore up the eurozone in case Italy comes on to the markets’ radar, Berlusconi is not bothering to carry out his side of the bargain.

Berlusconi’s fine art of political buffoonery and wiliness has got him remarkably far. But patience among his colleagues in the eurozone seems to have run out.

“Limited treaty change” sounds all well and good and paper. Clean, surgical, precise. The ailing part of the treaty – in this case the economic governance part – is adjusted and enhanced and then the treaty body is closed up again.

And limited treaty change is the talk of Sunday’s summit. It even made it into the conclusions, despite opposition by UK Prime Minister David Cameron.

The thinking seems to be that governments and citizens would be more open to the idea of treaty change – having only just put the seemingly interminable years of Lisbon Treaty ratification behind them – if they could be convinced that it is in the European economy’s best interest.

Earlier European Parliament President Jerzy Buzek – whose House is crammed with MEPs delighted at the prospect of the federal leap this eurozone crisis could imply – said as much:

 ”We must be rather gentle about (this) and delicate but I think we should start to open the discussion in our constituencies and to say that we can imagine that the treaty changes are not too big, are limited to one area of economic government, which could help to create a more stabilised European economy.”

 “We decided to explore the possibility of limited treaty change,” European Council President Herman Van Rompuy said. “The aim is deepening our economic convergence and strengthening economic discipline.”

 “Limited means not a general overhaul of the architecture found in the Lisbon Treaty.”

 This all sounds like pie-in-the-sky ideas delivered with lashings of wishful thinking.

The kind of treaty changes being mooted – including seeing fiscally misbehaving states brought before the European Court of Justice, the creation of super budget commissioner with real power over how member states spend their money, the creation of an EU finance ministry – all in themselves go beyond merely tinkering with a few abstract articles in the treaty to the transfer of real power to Brussels. After all, the decision about how and when to spend money is at the heart of a state’s powers.

This is not something that ought to be decided without a lot of discussion. A lot of discussion implies give and take. Who gets what in return for what else.

Which brings us to the Brits. The “EU” and “Brussels”  seems to have sneaked back up the Tories’ political agenda. A motion to be put before the House of Commons on Monday suggests Britons should have a referendum by May 2013 asking them whether they want to continue to be members of the EU, leave the EU or renegotiate its terms.

Although the motion is likely to be defeated, the Tory eurosceptic genie, which Cameron so far rather successfully has managed to managed to keep bottled, seems to have re-emerged. Tories remain generally exercised about the EU as a whole, and particularly exercised about its employment and social laws.

It is hard to see how Cameron could avoid widening “limited” to suit his backbenchers…

And what of eventual ratification? The Irish have had some experience of this. And Dublin is already saying another treaty would never fly.

According to a report in the Sunday Business Post last weekend, Dublin has told its EU partners that it is “just not realistic” to think that Irish people will pass a referendum. “We could happily agree to a new treaty and a referendum but we could not pass it,” the paper quotes a source as saying.

Short-term relief in the eurozone crisis. The German parliament (as expected) voted in favour of the strengthened eurozone bailout fund on Thursday.  And the detail of the votes showed that Angela Merkel managed to secure the all-important chancellor’s vote. In other words, she did not have to rely on the opposition get the draft law through parliament.

(MPs voted 523 in favour of the bailout, 85 against with three abstentions. Of the 523 votes, 315 came from the ruling centre-right/liberal coalition).

But as with every stage of this eurozone crisis, one potential pitfall has been avoided only to have another more complicated one spring up in its stead.

That little problem could be broadly termed: ‘what is going to happen next’ – as the €440bn fund is widely acknowledged as being too small to cope with contagion to Spain and Italy.

Nevertheless, surprisingly little of the three hour debate in the Bundestag focused on mooted plans to leverage the fund, potentially giving it up to €2 trillion in firepower.

German finance minister Wolfgang Schaueble has previously dismissed ideas that the fund would be made bigger but was more equivocal in parliament.

He hinted that while Thursday’s vote was purely about increasing Germany’s share of the loan guarantees from 123bn euros to 211bn euros, leveraging could come up later during negotiations on the guidelines for use of the fund. And that these guidelines would have to be agreed by MPs.

Green MP Gerhard Schick prompted the admission.  It is worth printing Schick’s question, as well as the answer.

 ”I would like to know what you meant by the words ‘efficient use of the EFSF’ that you used in Washington, because all experts understand this to mean leverage of the EFSF – that means that a much bigger sum of credit can be handed out. [I would like to know] if this leverage is possible with the decision that lies before the parliament today or if it needs a new parliamentary decision. When there is no need, then MPs must know in public that with this decision they are also allowing leverage. To my knowledge, this is already being negotiated and I find that parliament should know whether this is the case or not.”

To which Schaeuble answered:

“The guidelines that apply to the extended EFSF have not yet been fully negotiated”

 (This prompted an “aha” from one MP.)

Schaeuble continued:

“it is written in the draft … that these guidelines need the approval of the German parliament. Therefore all suspicion and uncertainty is indecent and inappropriate.”

So he opened the door to the idea. And with it underlined what is said only sotto voce – that MPs around the eurozone have just voted, or are just about to vote, for a mechanism that is nowhere sufficient and that plans are afoot to change it.

This is a cavalier approach. It is not going to increase trust between the political class in Europe and citizens. It is about time leaders were upfront about plans for the eurozone, the scale of what is needed and why it is needed.