Twenty-six European leaders turned up for a dinner in Brussels this evening with one burning question to discuss: Whether or not to change the European Union treaties to accommodate Germany’s demands for a new permanent bailout fund?
But one European leader burst in and insisted on talking about something else. That would be David Cameron, the UK prime minister, and his obsession was the European budget. Read more
Multiple leaders at Thursday’s summit expressed their deep misgivings about engaging in another round of treaty changes, with several insisting that the German goal of setting up a new, permanent bail-out system could be achieved within the existing treaties.
If the idea gets any traction within the closed-door meetings, it could be due to an unexpected proposal from an unexpected place: Finland.
According to a so-called “non-paper” – diplo-speak for an unofficial proposal – that has been circulated by the Finnish finance ministry and obtained by the Financial Times, much of what German chancellor Angela Merkel wants through treaty change could be achieved by simply attaching new rules to national bond issuances. Read more
It is still two hours before the summit, but it seems that one of Germany’s principal initiatives is already sinking badly: a drive to suspend EU voting rights from countries that violate budget rules.
Jose Manuel Barroso, the European commission president, broke his relative silence of recent days to condemn an idea championed by Angela Merkel, the German chancellor.
“If treaty change is to reduce the rights of member states on voting, I find it unacceptable and frankly speaking it is not realistic,” said Mr Barroso, who has thus far remained quiet on the key questions that will dominate this summit. “It is incompatible with the idea of limited treaty change and it will never be accepted by the unanimity of member states.” Read more
There was a distinctively northern European feel to the Liberal pre-summit gathering in downtown Brussels, with the leaders of Finland, Denmark, Estonia and Ireland welcoming new Dutch premier Mark Rutte to the fold.
Despite the intimate atmosphere – this is by far the smallest of the three leadership pow-wows – there was no sense that the Liberal Five will toe a common line going come dinner time. Read more
The opening feature of any EU summit is the gathering of heads of government at their partisan caucuses. These days none is more important than the European People’s Party, the right-wing EU coalition that includes Angela Merkel, Nicolas Sarkozy and Silvio Berlusconi. Read more
The call by Angela Merkel to reopen the European Union’s treaties in a major address to the Bundestag is already generating reaction from heads of government in other member states as they begin descending on Brussels for a two-day summit.
Ms Merkel worked the phones the day before the summit, calling several of her counterparts in an attempt to shore up support – a sign of just how precarious her position is and her need to come out of the summit with a victory following intense criticism at home for her political deal-making to win over reluctant allies. Read more
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Peter Spiegel is the FT's Brussels bureau chief. He returned to the FT in August 2010 after spending five years covering foreign policy and national security issues from Washington for the Wall Street Journal and the Los Angeles Times, focusing on the wars in Iraq and Afghanistan. He first joined the FT in 1999 covering business regulation and corporate crime in its Washington bureau, before spending four years covering military affairs and the defence industry in London and Washington.
Joshua Chaffin is one of the FT's EU correspondents, covering areas including policies on trade, the environment and energy. He has worked in the FT's Brussels bureau since late 2008 and before that was an FT correspondent in New York and Washington DC. 
Alex Barker is EU correspondent, covering the single market, financial regulation and competition. He was formerly an FT political correspondent in the UK and joined the FT in 2005.
James Fontanella-Khan is FT's Brussels correspondent, covering media, telecom and internet regulation as well as justice, employment and social affairs and its impact on eastern Europe. He was formerly an FT correspondent in India. He joined the FT in 2006. 
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