Winners and Losers

The ink is drying on last week's proposed EU treaty amendments meant to help contain the Eurozone crisis by tightening up restrictions on deficits and subjecting EU member states to greater scrutiny of their budgets. Although it is too soon to tell what effect the changes, if passed, will have, some winners and losers are emerging from the process. 

Two clear winners are Germany and Poland. In the case of Germany, it was able to push through its views on austerity and Angela Merkel, in particular, has strengthened her hand. Poland has also come out of the meetings with an enhanced standing as it firmly threw its lot with a more integrated Europe.

In Britain, in contrast, there seem to be all kinds of losers.  Foremost is the drumbeat of opinion that says that in failing to sign the new treaty, David Cameron has marginalized the UK. While public opinion in Britain supports his actions, as do the Eurosceptics in the Conservative Party, his coalition partners the Liberal Democrats, the most pro-European of all the parties, have suffered a blow. Nick Clegg has attacked the vote and Cameron's actions threaten the coalition.  In the end, it's not even clear that the ostensible reason for Cameron's vote - to protect the City's interests - will accomplish that; many people, including those in the City, argue that to be left out of decision making regarding financial regulations will harm the British financial sector.

Still, the biggest loser may be the credibility of the Europeans to sort out their financial mess.  The sharp drop in world markets on Monday and a return to rising rates on Italian bonds suggests that the decisions of last week have done little to reassure the world that the Europeans have finally put their house in order.