Angela Merkel is afraid that the German constitutional court could challenge the legality of the bail out arrangements put in place for Euro zone members to get them through the last crisis. She is pressing for a new EU Treaty to define the EU powers and to put them beyond constitutional doubt.
France is looking for EU solidarity and support at a time of spending and deficit crisis. Other member states with large deficits are hoping that the bail out measures in place will one day be available to ease their pain.
This all makes it more likely that the EU will press ahead with a new Treaty seeking wide ranging powers of economic government. The combination of legal uncertainty, the reluctance of many Germans to pay taxes to support the southern states, and the ever present aim of the EU bureaucracy to extend its powers will come together to demand a substantial extension of EU economic government.
This leaves the UK in a potentially powerful and interesting position. The UK will presumably say it intends to surrender not one iota of extra power to the EU. Otherwise it would in conscience have to grant a referendum which it does not seem keen to do. The UK does not have to sign a new Treaty, even if it does include an opt out that works. The Uk should require a good offer to persuade it to let the others go ahead with stronger central controls. There are powers and money to get back to improve the UK’s deal.
It will be a good test of the UK government’s negotiating skills, and a chance for them to show how determined they are in wishing to cut back on central controls and high spending budgets in Brussels.