Europe’s fiscal union plan ends in divorce

Eurozone economies will press on with a “fiscal compact” treaty after Britain vetoed a wider pact for all European Union states, the FT says. France and Germany have corralled 21 other governments into greater integration of national budgets, through a treaty that will arrive early next year, Reuters reports. German Chancellor Angela Merkel said that the EU had avoided a “lousy compromise”. Asked if the euro was safe as a consequence of the agreement, Poland’s prime minster said, ”I’m not sure.” The new fiscal rules will cap structural deficits at 0.5 per cent of GDP on pain of “more intrusive control” if governments fail, reports Bloomberg.