EUROPEAN LEADERS are set to travel to Brussels today to kick off a two-day meeting of the European Council – seen as a make-or-break event for the future of the euro single currency.

Leaders remain divided on how to fight the growing debt crisis, with France and Germany seeking the creation of a common fiscal government for the eurozone area – an idea others are reluctant to support.

European Council president Herman van Rompuy has circulated a number of policy proposals to leaders in advance of the summit, largely shaped by the belief that EU treaties already give it the powers it needs to fight the crisis.

France and Germany, though, are leading a lobby of countries seeking the negotiation of a new treaty – either as a successor to the Lisbon Treaty, or as a supplementary treaty applying only to the 17 members of the euro.

Enda Kenny, and others, have been instead looking for agreement to give the ECB greater powers in fighting the crisis – including tapping into its ability to print unlimited amounts of euro.

The fragmented feelings of the EU leaders have been even further complicated by British prime minister David Cameron’s insistence that he will veto any treaty plans which result in Britain ceding any more decision-making powers.

‘Tobin tax’

Cameron is also likely to oppose Franco-German plans for a Europe-wide tax on financial transactions, the so-called ‘Tobin tax’ – and he is only likely to agree to the plans if the City of London is granted an exemption.

This could be even more worrying for Ireland, which fears that firms based in the IFSC may be attracted elsewhere if their Dubiln operations are subject to the tax.

The Brussels summit, which begins later this evening, will be preceded by a European People’s Party congress in Marseille – which may provide an opportunity for many of the EU leaders to unify their stances.

15 of the 27 heads of government – including Enda Kenny, Angela Merkel and Nicolas Sarkozy – are members of the EPP, as are van Rompuy and the European Commission president Jose Manuel Barroso.

The Marseille summit may give observers an early indication of whether some common ground can be found – or whether the summit could remain deadlocked and become even more tense.

Yesterday Kenny told the Dáil that he expected the summit to continue for longer than was scheduled – with the Sun reporting that travelling Downing Street staff were also preparing for a three-day stay. The summit is intended to conclude tomorrow evening.

Today will also see a meeting of the European Central Bank’s board of governors in Frankfurt – where the bank may also opt to take a greater role in fighting the renewed liquidity crisis among the continent’s banks.

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