We should worry about what they haven’t discussed in Brussels

It hardly seemed the day for it, but Europe's political leaders enjoyed the red carpet treatment on Wednesday as they arrived for yet another crisis summit.

Apparently Wednesday night's meeting was the 14th such emergency conference in 21 months – about one every six weeks.

As they climbed out of their limousines in Brussels, our leaders adopted the "summit face" for the benefit of reporters, photographers and television crews. The summit face has been well and truly rehearsed by now and the best offer a subtle smile to offer a hint of reassurance but combine that with a set jawline plus frowning eyebrows to reflect the seriousness of the situation. It's quite hard to pull off convincingly, although after 14 attempts most practitioners have got to grips with at least a basic version. David Cameron has quickly become a leading exponent, showing others how it should be done – this has not always gone down well with his euro counterparts such as Nicolas Sarkozy, who believes Anglo Saxon upstarts such as Cameron shouldn't be trying to show him what's what in Europe.

But while the summit face has more or less been accepted as standard by leaders, the summit haircut still divides opinion. That's going to take a bit longer to sort out. However, this is politics. An Oscar night feel to proceedings at least added an element of drama to proceedings and, if you wind back 18 months to two years, progress is being made, however infuriating its stop-go nature.

Back then Greek bail-outs, a European Financial Stability Fund, and bank write-downs of as much as 50pc of Greek sovereign debt were being laughed out of court within the eurozone countries. Paris, Berlin, Rome, even Athens were in full denial. Now such measures are reality and lurching towards completion. Arguments between banks and the European Union over writedowns appear to centre on important technicalities, but technicalities all the same, such as future insurance arrangements for new bond issues.

Ultimately the eurozone is a muddle, always has been, and it muddles through as a result. Wednesday night was another staging post along the way towards an inevitably ugly resolution, albeit a temporary one. Until all eurozone members are forced to comply with the same fiscal disciplines so that credit ratings and bond yields converge there is nothing to stop the problems of the past two years re-emerging. Similarly, the imbalances within the eurozone will have to be addressed, as they must throughout the world, and the lack of competitiveness of nations such as Greece solved in a meaningful way. However, adjusting costs, such as wages, while maintaining a fixed exchange rate is a painful process resulting in cuts, unemployment and the civil unrest that has become an Athenian way of life.

Don't be surprised if key elements of the eurozone rescue plan are still being discussed at the G20 meeting in Cannes a week on Thursday as the sticking plaster begins to be applied.
Longer-term, however, the fundamentals of the eurozone construct are still flawed. The fault lines remain. And that's not yet on the agenda of any summit.

But it's not all doom and gloom

While political leaders were having a difficult day addressing their respective parliaments in Berlin, Rome and London, business leaders elsewhere in the world were having a pretty good day, on the whole.
Whether it was in the UK, US or indeed in Europe, the good news was very much outweighing the bad. Corporate earnings in America are coming in strong and beating estimates, albeit estimates that had been previously lowered.
Big names such as Boeing reported strong performances. Here, GlaxoSmithKline returned to sales growth. In Germany SAP, the world's leading supplier of business management software, reported higher sales and a stable outlook as its corporate customers use their financial stability to innovate and grow through investment in improved operational systems. The still improving corporate scene is not all being driven by emerging markets either.
US demand for durable goods rose in September by the highest amount in six months, while purchases of new houses rose more than 5pc, way ahead of expectations as the over-supplied housing market begins to clear thanks to lower asking prices. The world's biggest economy, by some distance, is showing signs of improvement.
Of course it's patchy, but it's wrong to say it's all bad news for employers.
That's said, there is no margin of error for policy makers. October's CBI industrial trends survey published on Wednesday showed output expectations and optimism among UK manufacturers falling to a point consistent with previous recessions. Business leaders can hang on for only so long to improvements they've engineered. While earnings surprise on the upside, the risk now is that politics will continue to disappoint on the downside.
damian.reece@telegraph.co.uk
From: http://www.telegraph.co.uk