Europe's question of time

Has Europe done enough to save itself? Possibly, but only if the eurozone can remain intact until the fiscal integration envisaged at the European Union summit is in place and is effective in imposing strict disciplines on the fiscal policies of those nations that have signed up to the pact.

While the outcome of the summit was politically messy and dominated by Britain's refusal to be party to an agreement that would have handed over control of financial regulation to the EU – which may ultimately see it shut out of the future of the 'new' Europe – the eurozone membership and a number of those countries with their own currencies (perhaps eventually all but Britain) did at least reach agreement on some core issues.

The problem with those agreements is that implementation of them will take time, at the least requiring legislative action within the individual countries and potentially a new set of European institutions and agreements because of Britain's use of its EU veto.

In the long run, fiscal harmonisation and the imposition of a Germanic approach to deficit and debt are desirable objectives, given that it was ill-discipline and indeed reckless profligacy that got the eurozone into this mess.

It is, however, the immediate future rather than what might emerge in some years' time that matters for the fate of the eurozone. Unless the summit outcome placates markets and opens access to debt markets at acceptable prices for governments and institutions, the region won't hold together long enough to realise the longer-term vision.

With southern Europe now signed up to severe austerity packages, there was nothing in the agreements that appears to provide any near term relief or stimulus to generate some growth to soften the harshness of those policies.

And while the summit did agree to expansions of Europe's bailout funds, the question of where those funds come from, whether they will be sufficient and when they will be available remain real and critical.

Similarly, while there is an agreement that European banks will need to raise more than €100 billion of new capital, it isn't clear where that will come from. Already beleaguered taxpayers may be called on again. It won't help that the ratings agencies have started downgrading European banks again.

It is conceivable that the agreement by the eurozone leadership to a plan might by itself calm markets. The inability of the eurozone to respond decisively to the developing crisis is at the heart of the way in which it spread from the periphery of Europe to its core.

Now they have a plan, albeit one still studded with question marks, not the least of which is how the new agreements relate to the treaties and institutions of the existing EU agreements.

Whether that's sufficient to convince the markets to release some of the pressure that has built up in European debt markets is the critical question. What the leaders agreed to over the past few days would have worked some months ago, but now might be regarded as too little, too late.