European Union

The leaders of France and Germany pledged to remake the rules of Europe, creating a closer economic union buttressed by strict rules on government spending and automatic sanctions against countries that break them. They now must persuade the rest of Europe to agree, and convince dubious financial markets that the steps are enough to regain control over a debt crisis that threatens to destroy the common euro currency. Compromising on their policy differences, French President Nicolas Sarkozy and German Chancellor Angela Merkel said at a joint news conference in Paris on Monday that the European Union — or at least the inner core of 17 countries that share the euro — requires greater budgetary discipline.

European leaders are coming to grips with the fact that in forging a stronger union capable of weathering the continent's debt problems, they are also likely to create a more German Europe. Germany and France, the continent's two heavyweights — in that order — each made a proposal in the last two days to tighten the bonds of the Eurozone by putting member nations' spending and budgets under stricter central control. Aligning fiscal and economic policies, they say, is the only way for the zone's shared euro currency to survive this crisis and avoid new ones.

The European Union slapped new sanctions on Iranian individuals, companies and organizations Thursday in response to a report alleging that Tehran had pressed ahead with ambitions to build a nuclear weapon. European governments also kept up their condemnation of the ransacking of the British Embassy in Tehran on Tuesday by an angry mob of protesters. Germany, France, Italy, Spain and the Netherlands have temporarily recalled their ambassadors from Tehran in solidarity with Britain, which shut down its embassy Wednesday and gave Iranian diplomats in London 48 hours to leave the country.

Western Digital Corp. won European Union approval for its purchase of Hitachi Ltd.'s Viviti storage business after it agreed to sell off some disk drive production to eliminate antitrust concerns. Western Digital has agreed to sell "essential production assets" for 3.5-inch hard disk drives, including a production plant and intellectual property rights linked to the business, the European Commission said Wednesday. "Hard disk drives are a key component of computers and other sophisticated electronic devices as they are used to store a growing bulk of data in the digital economy," EU Competition Commissioner Joaquin Almunia said in the statement.

She says more Europe. He says less Europe. Let's call the whole thing off? At the beginning of this week, the German and British leaders gave their responses to what is clearly an existential crisis of the post-1945 European project. On Friday, they meet in Berlin to see if they can bridge the gap. If they succeed, it will be a miracle on the Spree. Speaking at the Lord Mayor's Banquet in London, David Cameron evoked a Europe "with the flexibility of a network, not the rigidity of a bloc.

Eager to win back the confidence of financial markets, Italy's president on Sunday appointed economist Mario Monti to lead the country's new government. The move came almost 24 hours after Prime Minister Silvio Berlusconi submitted his resignation amid widespread celebration on the streets of Rome. President Giorgio Napolitano's announcement sets the stage for Monti, a former European Union commissioner, to form a new technocratic government that will try to navigate Italy out of the debt crisis with austerity measures sought by the European Union.

I appreciated "Not on Board" by Catharine Hamm [On the Spot, Nov. 6] about smartcard credit cards. I am one of those European Union travelers who wrote letters to credit card companies. At best, not having a smartcard is awkward for travelers from the U.S. At worst, it is dangerous being caught in a foreign country with no cash. I travel to the EU a few times a year for extended stays. The situation is getting worse. More and more, places are shaking their fingers at my American Express, and ATMs are accepting European Union cards.

The Greek drama is heightening by the day. Last week, Europe's leaders came up with a $180-billion rescue package for its most troubled member, Greece. Like previous efforts, the plan combines bailout funds with demands for continued austerity in an attempt to isolate Greece and leave the rest of Europe economically intact. This week, in response, a call by Greece's prime minister for a national referendum on the proposal surprised the world. The referendum may accelerate the inevitable fall of the Greek government.

The latest plan to save Europe from its debt crisis was greeted with a burst of self-congratulation from the bleary-eyed leaders who negotiated it and a respite from the months of pounding by the continent's financial markets. But the politicians who struck an early-morning deal in Brussels to avert financial collapse still face another ominous threat: a slide back into recession for their economies that could undermine the debt agreement as well as bring even greater social disorder to their streets.

Greek Foreign Minister Stavros Lambrinidis jokes that his ability to draw an audience comes from morbid curiosity in the economic fate of his small European country. "They want to see what a dead man looks like," he says with a laugh. With many observers proclaiming that Greece is on the brink of bankruptcy, Lambrinidis is in the U.S. pushing the message that Greece is not a lost cause, heralding his government's commitment to radical cuts in public spending and insisting its European partners will not let it fail.