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Europe is changing. Here's how. A reported blog.

Europe starts the week in limbo

French-German summit ends with nothing more than a pledge to have a plan in place before G-20 summit next month. Can the markets wait that long for a resolution to Greek debt situation and possible spread of contagion to Spain and Italy?

Start The Week

The weekend is supposed to offer a bit of breathing space and down time ... it normally allows problems to be put in perspective so they can be dealt with more effectivey when the new week starts.

Well, having rested up it seems like Europe's leadership and punditocracy have used their two days off to get even more nervous about the economic prospects of Europa.

The main reason is the lack of anything substantial out of a meeting between French President Nicolas Sarkozy and German chancellor Angela Merkel. Sarkozy assured the press after the meeting, "We are very conscious that France and Germany have a particular responsibility for stabilising the euro."

He promised a grand plan soon. "We need to deliver a response that is sustainable and comprehensive. Europe must solve its problems by the G20 summit in Cannes... By the end of the month, we will have responded to the crisis issue and to the vision issue."

Yes, the vision thing ... funny how little of it there is around these days.

It needs to be found soon ... G-20 finance ministers are meeting in Paris next weekend to prepare for the summit. There needs to be some kind of consensus reached about how to deal with Greece, Europe's banks, and all the other problems that have market predators out and about licking their chops.

One thing that was done this weekend was France, Belgium and Luxembourg agreed to effectively nationalize Dexia, the bank with a black hole in its balance sheet that was at the center of last week's speculative panic over European banks.

Over in the Financial Times, David Cameron was interviewed and put his two cents worth in about the euro crisis. (It's behind a modest paywall). Cameron told the paper he wants Euorpe's leaders to take a "big bazooka" to the crisis

He urged a swift resolution to Greece's situation ... and told Merkel to step up and increase the size of the Greek bailout fund.

He had a variety of other suggesions all made without a hint of schadenfreude. That's because even though Britain is not in the euro its economy is so entwined with Europe that the collapse of the currency would have almost as devastating an effect on Britain's economy as any inside the euro zone.

Another reason for Cameron not to be smug: since his government's economic austerity plan has been put in place British GFP growth over the last nine months has been precisely ZERO. Unemployment figures are due out Wednesday ... they are not expected to be good.

Oh, and his Secretary of Defence, Liam Fox, is caught up in an influence peddling scandal that looks like a resignation may be in the works.

What a jolly start to the week ... "things can only get better" as Brit pop group D:ream sang in happier times. 

http://www.globalpost.com/dispatches/globalpost-blogs/europa/europe-starts-the-week-limbo