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It is now very difficult to make a forecast on whether the eurozone leaders will reach the so much expected decisions to give sufficient grounds to the markets and the world to calm down that the worst would be avoided, because such forecasts are more or less pure gambling. Nonetheless, why are there reasons to doubt, no matter the reassurances that today a decision will be taken, that the deadline is today and that it cannot be postponed any longer? In the morning from Brussels a rumour started spreading quickly around the flat world (after Thomas Friedman) that it was possible tonight the leaders not to agree.

The reason

The stumbling block in the negotiations is the financing of the increase of the capacity of the rescue fund EFSF which is expected to swell up from its current 440bn euros in lending capacity and 779bn euros in guarantees to between 1 and 2 trillion euros in order to cover possible problems with Italy's and Spain's not serving their debts. In other words, the question is how the volume of the fund to be increased without this forcing the monetary union member states to pour more money, which would be practically impossible, especially after the experience with Slovakia, which has managed to ratify the agreement for the enhancing of the EFSF functions in the very last possible moment and the German constitutional court tied the government's hands when taking decisions related to additional pouring of money in the fund. Finland also doomed the previous timid attempts to enhance its functions.

This is why at the moment the leaders are in a stalemate - they need a temporary solution that would give them another postponement to search a longer term and sustainable solution. On the other hand, though, the events are already requiring that longer term and sustainable solution and there are no outlooks for more postponements. What the EU has to do is to start working on the difficult work which will take more time but any commitment for an overhaul would give the so longed postponement. Well, the leaders will have to bear in mind that no one is going to wait for them for another 10 years to deliberate on whether to seal their friendship with a treaty or a constitution.

From this perspective, the forecast is that today there will be no agreement. There are still several hours during which I can be refuted, with pleasure by the way.