Interesting times for the EU

A typical Ambrose piece strings together gloomy prognostications from analysts and research reports, and concludes with his own summary.

Today, as usual, the most interesting part comes at the end. Details of last week's EU summit confirm that Ms Merkel was ambushed by a French-led bloc, agreeing to demands for a €750bn rescue package for Club Med under duress, he says. Karl Otto Pohl says this was about protecting banks which have lent to Greece - especially French banks.

Ambrose concludes that "France may have won a Pyhrric victory, securing a short-term triumph at the cost of alienating the German people and setting off a political process that may cause Germany to turn its back on EMU".

Jeff Randall's theme is that the euro in its present form is dead. "In its present form". It will doubtless survive somehow. How quickly will the eurozone diminish? That depends on Greek politics, German politics, and the markets. Hardly a basis for firm forward planning.

When Greece defaults, there will be huge market pressure on other countries which might follow. Having spent on Greece and failed, Germans will refuse to throw larger amounts of good money after bad to support the other PIIGS. France will demand to cling on in the diminished eurozone, and blame everyone else for its difficulties. In private, the german government is doubtless already turning the screw on its banks.

Once countries start to be forced out of the eurozone, the notion of a European "Union" will start to sound bizarre. Germans may start to look more closely at the subventions they are giving out to other european countries. So may other eurozone paymasters. The Netherlands can't change the politics of the EU on its own, but may prove very ready to follow a German retrenchment.

If the money tap is turned off, will Greeks want to leave the EU altogether? That would be seismic.

The central question is not whether Germans will tire of supporting Greece. It is not even when Germans will tire of supporting Greece. When that happens - and it will - will that refusal feed across into the other subsidies Germany pays to other EU countries?

If it does, who will pay for the EU then?