There is not much in the playbook about leaders in Europe suddenly forming a block to oppose German Chancellor Angela Merkel on key financial strategies.
Merkel has plans, and well she might, for walking out of Brussels a winner, even though German newspapers are currently lambasting the fiscal disciplinarian for caving under pressure from Italy, Spain and France, which vowed to block a long overdue $150 billion growth plan if officials could not push forward on proposals to form a eurobond and to send international aid directly to banks, rather than governments.
That final proposal came from Spain, which is facing a massive financial system meltdown due to a property market bust that caught up with the country when the global downturn hit in 2007.
The Spanish government, as it happens, does not have a track record of generous giveaways. Until Germany recently tightened its budget belt, Madrid was on par with Berlin concerning the European Union's fiscal goals on debts and deficits.
Prime Minister Mariano Rajoy, therefore, had a fair argument when it came to asking for a bailout that saddled banks with loans -- in friendly terms, allowed Spanish banks to recapitalize -- rather than add more debt to Spain's government, which had already worked hard to keep debt in order.
Step one in Brussels was for heads of state to agree to a new supervisory framework for eurozone banks -- and from there, events played out as if Merkel had set her own trap.
Demanding tighter fiscal control, suddenly she had it. Although details are a lifetime of meetings away, media reports said the new supervisor, which could be a stronger European Central Bank, could have more power than national regulators in various member states.
That meant the group would have oversight on loans that banks in Spain and elsewhere require.
"It's very important that we put into motion procedures for immediate action -- that was something much hoped for," The New York Times quoted French President Francois Hollande as saying.
The one caveat, The Washington Post reported: The deal comes too late to include Spain's $125 billion bailout request, which will go to the government rather than the nation's banks.
Italy won an agreement to have bailout funds be used for buying government bonds, which means as the financial assistance adds to government debt it could simultaneously be used to reduce that country's borrowing cost.
"Italy and Spain broke the will of the iron chancellor by out-negotiating her," Germany's Der Spiegel Web site opined.
This isn't necessarily true. There are many, many details to be ironed out, which leaves Merkel with plenty of opportunity to demand tighter control before anyone signs any checks.
In international markets Friday, the Nikkei 225 index in Japan gained 1.5 percent and the Shanghai composite index in China rose 1.35 percent. The Hang Seng index in Hong Kong added 2.19 percent and the Sensex in India gained 2.59 percent.
The S&P/ASX 200 in Australia rose 1.23 percent.
In midday trading in Europe, the FTSE 100 index in Britain gained 2 percent while the DAX 30 in Germany surged 3.57 percent. The CAC 40 in France soared 3.64 percent and the Stoxx Europe 600 jumped 2.35 percent.
|Additional Analysis: Economic Outlook Stories|
ALGIERS, Algeria, May 24 (UPI) --Algeria's government is under pressure to ease its foreign energy investment laws after BP warned it may delay important projects in the North African state.
ARLINGTON, Va., May 24 (UPI) --BAE Systems has received a two-year contract extension from the U.S. Army Space and Missile Defense Command to support its Future Warfare Center.