The news behind the news

You'll see on the front page of the WSJ today an article about European leaders pursuing a new fiscal union. What the article doesn't say, but should, is that this is the direct outcome of a new determination by German Chancellor Angela Merkel and her finance mininster, Wolfgang Schauebel, to amend the eurozone treaties to allow for more fiscal discpiline. They announced this on Nov. 19 at their Christian Democratic Union party conference.  It probably won't save Greece from dropping out in the end, but this could be the biggest single move toward saving the eurozone that we've seen in two years. I wrote about the likelihood of this occurring a month and a half ago.