On Wednesday 27 June 2012, French President Hollande met German Chancellor Angela Merkel for preliminary talks prior to Thursday's, yet another "crucial", European Union meeting to try to further resolve the crisis in the Eurozone. The political leaders of France and Germany, so recently partners in agreement on the best way forward for the single currency are, effectively, now poles apart in their approach to the crisis and its solution.

Mr Hollande has done much since being elected in May, to publicly side with his counterparts in Spain, Mr Rajoy, and Italy, Mr Monti who want the austerity measures renegotiated, watered down or supported with the direct intervention by the European Central Bank (ECB), all options opposed by Germany. It is difficult to see how President Hollande and Chancellor Merkel, despite any issue of an official communiqué that may be broadcast using terms like "mutual respect for each other's position", "understanding" and the like, can reach a meaningful agreement.

The French, by their actions have withdrawn from the previous accord made between Chancellor Merkel and Mr Hollande's predecessor, Nicolas Sarkozy and it is hard to see at this juncture how that partnership between the two countries which formed the very basis of the European Union and its precursors can be quite so close in the future.

Both parties have spoken either directly or through their spokespersons defending their positions. President Hollande more often and volubly it would appear, pressing home his stance, which to be fair, he campaigned on during his bid for the Presidency, and his effort to present Chancellor Merkel with a united opposition and isolated.

Chancellor Merkel has been much more restrained but no less persistent on her reiteration that there will be no fundamental renegotiation on the terms already set. The austerity measures will be applied as agreed and formally signed by Greece, Ireland, Italy, Portugal and Spain - with Cyprus now in bailout talks - and recantation not permitted. There's further a refusal to consider mutualisation of the Eurozone's debts through the issue of Eurobonds or the ECB to become a banker of last resort.

Like its Chancellor, Germany has spokespersons who have been less seen and heard but are powerful none the less. Germany's Constitution gives its central bank, the Bundesbank, a degree of statutory obligations that is rare and although not entirely free in the past from political pressure, "constrains the government's freedom of action". Its independence is fiercely guarded and defended by politicians, the President of Germany and the German public, making head-on confrontations exceptional.

On 14 June Dr Jens Weidmann, President of the Bundesbank and Member of the Governing Council of the ECB gave an interview at an Economic Forum in Mannheim to four newspapers from Italy, Portugal, Greece and Spain, duly published the next day. It's doubtful that it made pleasant listening as he described what he sees (read Chancellor Merkel and Germany) as the "...only viable path to a stability-oriented fiscal union."

Dr Weidmann starts by asserting a nation's right to return to the rules laid down by the Maastricht Treaty: "...making their own decisions and bearing the consequences themselves. The guiding principles here are national sovereignty and subsidiarity."

That, I guess covers the likes of the UK and would allow Britain and the like-minded to remain in the EU.

Then the good bit for serious Member countries wishing to stay in, enter at a later stage, or re-enter the Eurozone.

Real Fiscal Union. Mr Weidmann started by warning that this alone cannot fix the problems that "many countries are facing today: high unemployment and a lack of competitiveness" (which will need considerable time to address) and so Fiscal Union had to be accompanied by a properly structured "stability union".

"For a stability oriented fiscal union the following imperative requirements apply:

"First, the willingness to submit themselves in a binding manner to strict budgetary rules.

"Second, the willingness to hand over sovereignty in some areas to a central level that effectively monitors compliance with the rules, and above all, can enforce them."

It goes without saying that Renegotiating is not an option - but Herr Weidmann said it anyway!

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