Slow going

Over a roast dinner garnished with mushrooms and white truffle slices, Europe's heads of state and government gathered in Brussels hoping to find common ground on the further development of the EU economic and monetary union.

But the 27 summit participants talked late into the night without making any major decisions. These decisions, said German Chancellor Angela Merkel at the beginning of the day, would only be made at the next EU summit in December.

French President Francois Hollande, however, was of a different opinion, saying that EU leaders had to decide now on whether to create the new post of banking supervisor in January. Hollande, acting as an unofficial spokesman for the southern European crisis states, said they needed the new position as soon as possible, in order to unlock new capital from the ESM rescue fund for their ailing banks. These funds would only become available once the role of banking supervisor had been established.

Devil in the details

Germany, Finland and the Netherlands - the northern eurozone countries - are putting on the brakes. Merkel, much like her finance minister, Wolfgang Schäuble, often repeats her motto: "thoroughness is more important than speed." And in fact, a number of complex legal issues remain unclear concerning the banking supervisory role.

The UK and Denmark, countries that remain against adopting the common currency, have criticized that the banking supervision is to be controlled by the European Central Bank, which actually is only responsible for the euro.

Legal advisers for the European Council also have their doubts as to whether the proposed setup is actually legitimate, according to the Financial Times. They expect that the ECB's basic statute will likely need to be altered.

A compromise is emerging

Senior government officials from the German delegation objected to the proposal that the new banking supervisor begin work in January - that was not the decision made at the last summit in June. France, Spain and Italy, however, have insisted. Luxembourg's Prime Minister Jean-Claude Juncker said that if the two sides could not come to an agreement, then more discussion was probably necessary.

In fact, Mario Draghi, head of the European Central Bank (ECB) and the man who would have a significant role in the banking supervision, said last week that the ECB's supervisory role would have to be established over the course of 2013, and could only begin work a year from now.

As a compromise between the French and German sides, it was agreed that the legal framework for the banking supervisory role would be established by the end of 2012. When the actual work would begin, however, has not yet been fixed.

"It is to be gradually established in 2013," said a spokeswoman for the European Commission after the late-night talks. Only from 2014 would the 6,000 banks in the European Union come under common supervision, according to sources in the French delegation.

In the spirit of the Nobel Prize

Before dinner, European Council President Herman Van Rompuy urged the leaders to remember the recently awarded Nobel Peace Prize and work toward the advancement of European integration. "The Nobel Peace Prize is to provide encouragement," he said.

Also up for discussion on Thursday was a set of reforms drawn up by Van Rompuy, European Commission President Jose Manuel Barroso, the Eurogroup and the European Central Bank in recent weeks. In the document, Rompuy called for stricter budgetary control and a better coordination of economic policies.

This pleased the German chancellor, who even suggested there be a super budget commissioner who would have the right to intervene in national budgets. This was a step too far for Hollande, who instead took a liking to another of Van Rompuy's ideas, in which he suggested establishing a common debt redemption fund The President suggested joint borrowing and a common redemption fund for bad debts. Both the fund and the idea of Eurobonds have been rejected by Germany, according to top government officials in Brussels.

New rescue fund for Eurogroup?

As an alternative, Merkel earlier this week brought up the idea of a new fund for troubled eurozone states that would fund economic growth projects in these countries. The fund would serve as an incentive for ambitious reforms.

The size of this fund is not yet known, but Merkel suggested in the Bundestag earlier this week that it could be financed by the financial transaction tax that 11 eurozone countries have said they will introduce. Other leaders have greeted this proposal with skepticism, including Austrian Chancellor Werner Faymann, who said "such a fund was not needed now."

'Serious debate and concern'

Martin Schulz, the president of the European Parliament, said many summit participants had indicated that these discussions were about the future of the European people.

"In my time here, I have rarely experienced a debate in the European Council that has been so serious and full of great concern, but one that also indicates a willingness to tackle the issues," said Schulz. The decisions about possible new steps toward integration are expected at the next EU summit in mid-December. Until then, any necessary changes to the European treaties needed to be clarified, according to German officials.

Treaty changes would have to be unanimous, and would be followed by a complicated ratification process in all 27 member states. Finance minister Schäuble has already suggested convening the committee required for such amendments before the end of the year.

The 27 EU leaders agreed on at least one point, however: On December 10, the president of the European Commission, the Council and the European Parliament will travel together to Oslo to accept the Nobel Prize. One of the men will receive the medal, another the certificate and the third will give the acceptance speech. Who will be allowed to do what, however, still remains to be decided.