Chancellor Angela Merkel told political supporters yesterday that the eurozone debt crisis presents Europe with its toughest challenge since the Second World War, and insisted that closer political union and tough fiscal sanctions offered the best hope of weathering the storm.
The problem is lack of politician-accountability, so the only real solution is to subject politicians and bureaucrats themselves the ladies and gentlemen who preside (and have presided) over fiscal disaster to face serious fiscal sanctions on a personal level.
But Berlin wanted to remove political discretion from the fiscal sanctions procedure, while France was determined to allow politicians the last word on any decision to punish a country for budget delinquency.
Europe's leaders must push through an enforceable system of political and financial sanctions, including stiff fines for repeat violators of fiscal guidelines.
The fire comes at a time of increasing fiscal strain for the president, Laurent Gbagbo, who is facing international financial sanctions because he has refused to step down after losing an election in November.
In what was being seen in Westminster last night as the death knell of New Labour and a return to a form of traditional left-right politics, Darling became the first chancellor since the 1970s to announce income tax increases, and also scrapped Gordon Brown's fiscal rules to sanction a doubling of borrowing this year.
The lively, late-night debates were about how the EU can make fiscal rules and sanctions bite.
He wants to temper fiscal discipline and sanctions in the new European treaty with a commitment to promoting economic growth and jobs.
Despite some progress towards a lasting nuclear deal that could potentially end years of crushing sanctions, fiscal growth has been slow, and many worry that this year – 1393 on the Iranian calendar – will bring even leaner times.
They would amend the EU's treaties with two goals: to remove some political discretion in the first step towards subjecting national governments to tighter fiscal monitoring and sanctions; and to enshrine balanced-budget rules in national constitutions, with the European Court of Justice (ECJ) given powers to rule on whether they comply with European guidelines.
