The applause welcoming the agreement announced at four a.m. in Brussels is rapidly giving way to questions, notably about the European Financial Stability Facility (EFSF).

This latter seems to have been cobbled together around the idea of guaranteeing some of the debts of indebted countries, but its effectiveness is doubtful. And its firepower, at 1 trillion euros, remains at the bottom of the range that was envisaged.

Furthermore, the other idea of creating a second fund, a "special vehicle" open to capital from China and emerging economies, has come under broad criticism, and not without reason. Should it be put directly into the hands of China? Would it not hamper any move against the yuan's value or, more broadly, any move to denounce this or that Chinese policy?

But to get back to basics – and to what’s missing: growth. We still have to address the two root problems, which are the lack of a common macroeconomic policy and the divergences among the member countries of the union. The first topic is widely discussed in the Brussels agreement, but only in terms of monitoring.

The heads of state and government have taken two types of decisions. First, to strengthen governance in the eurozone at the risk – which they have accepted – of opening up a gap with the EU member states outside the eurozone, and at the risk – the consequences of which have not been calculated – of creating an extra level of bureaucracy.

A golden rule bill

To this end a “eurosummit” was called, chaired not by the Ministers of Finance but by the heads of state and government. The stakes are getting higher.

A permanent secretariat (under the opaque name ‘Eurogroup Working Group’), whose coordination with the Commission is unclear, has also been drawn up: the balance between the intergovernmental and the federal is wavering

Second, and more engagingly, the monitoring of the budgets of the member states has been strengthened. Since the beginning of this year a coordination mechanism has been in place under the name (less opaque but still jargon all the same) "European semester".

This requires each state to include its budget bill in a multi-year budget discussed beforehand in Brussels; Europe would then frame up the national budgets before they are voted on.

The agreement on Thursday morning goes further. It requires that before the end of 2012 a "golden rule” bill be introduced at the constitutional level (we might note in passing that the French Socialists have been forced into a corner on this).

Great disappointment of the euro

It indicates that the budgets should be based on "independent” growth forecasts, the first very important step towards an independent budget committee in the Anglo-Saxon fashion. And it states that any budget initiative that may affect the other countries should be subject to a consultation before the Commission.

For countries that are outside the control of Maastricht and that get placed "under review”, the discipline borders on guardianship. The Commission is required to manage ("monitor") the execution of their budgets.

Nevertheless, monitoring is not coordination. Germany wins here, with its call to impose a compulsory discipline. This is not a bad thing. France, dreaming of an economic government, may end up getting nothing for its pains. And nothing, either, was said during the summit about economic policy for the overall zone.

Nothing about the risk to growth from imposing austerity on everyone at the same time. Nothing about the need for the countries in surplus (clearly Germany) to keep up strong demand at home, by way of compensation.

And very little was said about the other root of the problem: divergence. This is the great disappointment of the euro. Because instead of converging under the influence of the euro, economies have done the opposite, and the gaps in productivity, labour costs and foreign trade have all grown wider.

Germany is wrong here

The divide between the Europe in surplus, in the north of the continent (Germany, Netherlands, Denmark, Czech Republic, Hungary), and those running deficits in the south (Greece, Italy, Spain, Portugal and also France) has widened.

Therein lies the key problem: these countries are producing and selling fewer and fewer industrial goods and services. Increasingly, they are living beyond their means.

What jobs will there be in Greece in ten years? That's the essential question posed by the crisis in the euro area, and it’s a question rippling out from the south to all the other countries.

Monetary union was not enough: on the contrary. Germany is wrong here. Financial transfers have been made, and more will be needed, but they are not enough either. What else to do? What mobility, what competitiveness, what specialisation?

The Brussels agreement is merely asking Herman van Rompuy to come up with some proposals before the end of the year. Whether Europe will accept the necessary remains in doubt.

Translated from the French by Anton Baer