Quick recap of EuroSummit Failure and problems for the Euro

Kicking the Euro When Europe Is Down - New York Times

This pretty well sums it up
Europe still adrift
Nice place to visit, but not sure I would want to do business there.

"The shared money that replaced national currencies in 2002 was always as much a political as an economic idea. It symbolized the pursuit of a European political union. Without such union, the French and German backers of the euro argued, the new money would be orphaned.

But with the French and Dutch rejection of a European constitution two weeks ago, momentum toward further political integration was lost. The time of the orphans is upon Europe. The European Union budget is in dispute, Europe's direction unclear. The 'pause for reflection' called for by European leaders last week in Brussels is an admission of paralysis.

This paralysis was evident in the suggestion from the French president, Jacques Chirac, that further expansion of the 25-member E.U. was inconceivable 'without the institutions capable of making this expanded union function efficiently.' Turkey, in other words, will have to wait because the union is rudderless.

A fundamental European conflict has taken hold between the French-German-Italian push for federation (embodied by the euro) and the British-Polish-Scandinavian stand for a Europe that is more free trade area than cohesive political entity. Because the more rigid economies of the former grouping are not as dynamic as those of the latter, Europe's unifying forces are faltering.

As a result, the euro looks like a money without any prospect of a European government to back it. 'In the long term, a monetary union without political union is unthinkable,' said Alberto Majocchi, an economist who is president of Italy's Institute for Studies and Economic Analyses.

Even in the short term, Europe's lack of political coherence can cause economic problems in the euro zone.

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