EU Summit: Everyone is a winner... for now

As is traditional, a leaked copy of the next EU Summit Conclusions has already been making its way around the media long before the summit has even commenced (due on 17-18 October).

As it is still an early draft, little can be drawn from these 'conlcusions' but so far the officials charged with drawing them up seem to have dropped in something for everyone:

France, has received a mention of an EU Financial Transaction Tax despite, as we reported yesterday morning, it still being far short of the nine states needed for the project to get off the ground.

Germany, has received an assurance that there will remain a "clear separation" between the ECB's monetary policy and its new supervisory functions - another clear hat tip to Bundesbank demands that price stability (inflation) remains the ECB's primary focus.

The UK and other non-euro states, have recieved an assurance that there will be a "level-playing field" (an English expression) in the new supervisory structures under the proposed eurozone banking union and that the "integrity of the single market" will be preserved for financial services.

The UK has also managed to insert a phrase regarding the "voting modalities" in the European Banking Authority, which the document suggests will be looked at to ensure non-eurozone countries will not be prejudiced by a Eurozone caucus.

The MEPs, often an obstacle when it comes to financial regulation, have been promised that the ECB will have "appropriate accountability" in its newly widened role. This is unlikely to placate their desire for new powers but might buy some peace.

Spain, has received wording designed to calm its bond market by raising the prospect of ESM direct bank recapitalisation including 'legacy assets' (i.e. bank bailouts which have already taken place being shifted onto the ESM books). The draft wording calls on the Eurogroup (read Germany, Finland and the Netherlands) to "agree on the exact operational criteria that will guide bank recapitalisation by the ESM in full respect of the 29 June Euro Area Statement". This could still go either way, but Commission President Jose Manuel Barroso has made it clear that he wants Germany to stick to the plan as was originally envisioned/interpreted.

This is, of course, all well and good, but we find it hard to imagine that the final conclusions will be able to maintain what everyone wants. There are likely to be some fights along the way (not least over the last point), lets hope the UK Government is ready to ensure its needs remain included.