There's a broad sense of relief in Brussels. Finally, a summit which wasn’t taking place in the midst of an economic emergency, EU leaders agreed.

Commission chief Jose Manuel Barroso smilingly remarks that less drama at a summit isn't such a bad thing. Yet so far, he himself was quite fond of painting the situation in rather dramatic terms. All of a sudden, Brussels has appeared to sit back and relax. But why is that exactly?

Sure, the new treaty on fiscal responsibility has finally been signed. Every eurozone country and most other EU member states have agreed to make it more difficult for EU governments to run up big deficits. There will also be automatic punitive measures if a state fails to comply. The second bailout for Greece is on the way and the financial markets have calmed down somewhat – not least because more money is coming from the European Central Bank (ECB).

Old habits die hard?
But the veil of calm which has descended on Brussels is premature. EU leaders want to give their countries the feeling that things are finally getting better. That's understandable. But that is also exactly where the problem lies. A sense of relief can all too easily lead back to dangerous old habits.

Greece for example has far from solved its fiscal problems. The recession in Greece has entered its fifth year growth is nowhere in sight. There are also doubts over whether Athens will really take on all the help that's being offered to implement the necessary reforms. Indeed German Finance Minister Wolfgang Schäuble has refused to rule out the possibility of Greece needing further aid.

Lithuania's President Dalia Grybauskaite has been slightly more succinct. "Don't worry," she told reporters. "If, in future, a third rescue package is needed, there will be a third bailout." Excuse me? It's exactly this approach that worries me.

More work ahead

Another cause for concern is that Spain has also failed to meet its deficit target. The government in Madrid is already asking the EU commission to be more flexible in its enforcement of strict rules. But hang on – didn't the fiscal pact intend to finally bring about the discipline that so far has been lacking? If the commission concedes then it's easy to imagine that soon every country will find some reason or other why, in its case, the rules shouldn't apply.

There's also the new role of the central bank. The ECB is increasingly politicized and helps to finance states that are in trouble even though, strictly speaking, the bank isn’t permitted to intervene. Even if the ECB has had little other choice, this policy will eventually lead to inflation.

The EU has created an important framework to deal with the crisis. But most of the work is still to come. If Brussels gives in already, the crisis will be back with a vengeance.

Author: Christoph Hasselbach / ai
Editor: Charlotte Chelsom-Pill