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EU leaders defend the euro

Dinner meeting on Greek bailout results in a “stabilization mechanism” plan.

He said the bloc would institute stronger surveillance of eurozone economies — especially regarding debt levels and the “competitiveness gaps” between states, two indicators that are now known to have been harbingers of the current crisis in Greece, overlooked even by the EU’s statistics agency.

To avoid a repeat of that situation, Barroso is due on Wednesday to unveil plans for increased EU surveillance and coordination of member states’ economies.

Greek Prime Minister George Papandreou expressed, perhaps with some relief, what had by now become obvious: that the meeting confirmed that the “need to safeguard the eurozone goes beyond Greece's problems.”

Merkel was the most tight-lipped following the meeting, skipping a full-blown press conference to rush home to Germany ahead of regional elections Sunday.

Germans aren’t in favor of bailing out the Greek government and neither was their chancellor until the risk of the Greek crisis spreading throughout the eurozone threatened to drag down healthier economies with it. She tried to postpone authorizing her share of the loan until after the Sunday balloting, but market pressure — and that of her eurozone counterparts — forced her to act sooner.

So Merkel reluctantly trudged off to Brussels after both houses of the German parliament approved the loan Friday and German President Horst Koehler signed it.

If Merkel’s coalition loses its majority in parliament, Germany's $37 billion portion of the loan is going to have been very costly for her.

But there’s another price being paid by people all over Europe, said Constanze Stelzenmuller of the German Marshall Fund. As each measured attempt to calm markets fails, she explained, “people are overwhelmed by the sense that this is an economic crisis where governments and politics have very little leverage on what happens. The markets are essentially buffeting the nation state and buffeting politicians.”

“People are I think genuinely and justifiably, deeply worried about governments no longer being able to make economic and monetary policy,” she added.

But eurozone leaders are going to use every hour between now and Monday morning giving it another try.