Upon the conclusion of the summit the pundits and financial experts expressed their opinions as to which leaders successfully secured their goals. In simple terms; who won and who lost, and I am not talking about the Euro 2012 soccer competition. That competition produced a clear winner which was not the case at the summit.

The much maligned Prime Ministers of Italy and Spain, Monti and Rajoy, appeared to have come away from Friday’s meeting with their goals in hand. These leaders negotiated a broad agreement which requires a fundamental change in EZ monetary philosophy. This agreement arrives just in time for Italy and Spain to negotiate more favorable bailout terms than those that were extended to Greece. The Prime Ministers will not have to convince their respective governments (citizens) to enact socially and politically unpopular austerity measures. Bailout monies can be dispensed directly to Spanish and Italian banks without any involvement of the dreaded monitoring agencies. The Prime Ministers from Italy and Spain left Friday’s meeting all smiles.

I am convinced France’s President Holland had pushed his counterparts to focus more on growth and less on biting austerity measures as a way to solve the EZ’s sovereign debt problem. France’s President indicated that EZ had turned the corner in resolving the bloc’s financial problems without suffocating growth and expansion. President Holland was more than pleased with Friday’s broad agreement that moved the bloc closer to the reality of Eurobonds. In my opinion these three leaders managed to successfully secure more flexibility in the use bailout funds. This was the first summit that domestic political considerations held sway over financial theory and practice.

Some experts and commentators suggest that the bigger loser at Friday’s summit was German Chancellor Merkel. For almost two years the German Chancellor has used her country’s economic might to steer the EZ towards solutions that required fiscal austerity and financial discipline. Many suggested that she had been pushed-around by the “big boys” of the EZ who soundly refused to go along with her much criticized austerity measures. It is important to remember that Germans  are skeptical about pledging their nation’s prosperity to rescue weaker EZ economies. Over the last few months there has been a growing chorus of discontent with Ms. Merkel’s efforts to pledge German assets as and for security for the euro’s future. It would seem that the German leader was forced to accept terms that considerably weaken her national political support. Friday’s agreement was only reached only considerable German concessions.

Yet, it could be argued the Ms. Merkel was the real winner on the first day of the summit. We can concede that the German leader is an astute politician who has a good grasp of the problems facing the EZ. She knows that the bloc’s present composition depends to a large and indispensable degree on German financial support. Perhaps based solely on nationalistic reasons, Ms. Merkel decided to make a deal that she had not intention of keeping. I do not believe that the German leader is going to change her position 180 degrees just to appease leaders who have no interest in respecting German limitations.

In a piece entitled “What Must Be Done to Save the Euro” which appeared in the New York Times Economix section on June 29, 2012, Laura D’Andrea Tyson weighs in on the debate of the significance of the EZ’s latest agreement. Ms. Tyson is a well known and respected professor at the Haas School of Business at the University of California at Berkeley. Under Bill Clinton she served as the chairwoman of the Council of Economic Advisers. According to Ms. Tyson the agreement reached by the leaders represents a real step in reversing Europe’s slide in recession and stagnation. She blames the continent’s financial woes on s serious of missteps and incorrect diagnosis of the real problem. According to Ms. Tyson and other experts austerity has not worked and in fact it has been counterproductive. The implementation of austerity measures have led to a substantial increase in the number of unemployed while, at the same time, causing economic stagnation. Difficult political decisions must be made to stimulate growth and retard the crisis. She is in favor of the EZ lending money directly to key banks to avoid aggravating member nation’s debt problem. Additionally she supports the idea of the establishment of a Europe-wide supervisory authority under the European Central Bank (ECB) to approve the use of rescue funds for bank bailouts. The European Union Treaty (EU) precludes the ECB from purchasing the sovereign debt of its member nations. Clearly in order to Ms. Tyson’s recommendations to be implemented the EZ and EU would have amend existing law and enact others.