Europe’s great divorce

In an effort to stabilise the euro zone, France, Germany and 21 other countries have decided to draft their own treaty to impose more central control over national budgets. Britain and three others have decided to stay out. In the coming weeks, Britain may find itself even more isolated. Sweden, the Czech Republic and Hungary want time to consult their parliaments and political parties before deciding on whether to join the new union-within-the-union.

So two decades to the day after the Maastricht Treaty was concluded, launching the process towards the single European currency, the EU's tectonic plates have slipped momentously along same the fault line that has always divided it—the English Channel.

Confronted by the financial crisis, the euro zone is having to integrate more deeply, with a consequent loss of national sovereignty to the EU (or some other central co-ordinating body); Britain, which had secured a formal opt-out from the euro, has decided to let them go their way.

Whether the agreement does anything to stabilise the euro is moot. The agreement is heavily tilted towards budget discipline and austerity. It does little to generate money in the short term to arrest the run on sovereigns, nor does it provide a longer-term perspective of jointly-issued bonds. Much will depend on how the European Central Bank responds in the coming days and weeks.

Some doubt remains over whether and how the "euro-plus" zone will have access to EU institutions—such as the European Commission, which conducts economic assessments and recommends action, and the European Court of Justice, which Germany hopes will ensure countries adopt proper balanced-budget rules—over Britain's objections.

But especially for France, on the brink of losing its AAA credit rating and now the junior partner to Germany, this is a famous political victory. President Nicolas Sarkozy had long favoured the creation of a smaller, "core" euro zone, without the awkward British, Scandinavians and eastern Europeans that generally pursue more liberal, market-oriented policies. And he has wanted the core run on an inter-governmental basis, ie by leaders rather than by supranational European institutions. This would allow France, and Sarkozy in particular, to maximise its impact.

With the entry next year of Croatia, which will sign its accession treaty today, the EU is still growing, said Sarkozy. “The bigger Europe is, the less integrated it can be. That is an obvious truth.”

Indian hospital fire in Calcutta kills dozens

At least 89 people have been killed in a fire that broke out in a hospital in the eastern Indian city of Calcutta (Kolkata), officials say.

Most of the victims were patients who were trapped after the flames spread through the AMRI hospital.

The fire started in the multi-storey hospital's basement, where flammable materials were stored. Firefighters took five hours to control the blaze.

Six board members of the hospital have been arrested.

They include hospital co-founders SK Todi and RS Goenka. West Bengal Chief Minister Mamata Banerjee said the licence of the six-storey hospital in Dhakuria in the southern part of the city had been cancelled.

She said the fire was an "unforgivable crime" and that those responsible would be given the harshest punishment.

A Upadhay, a senior vice-president of the AMRI hospital company, told Associated Press there were 160 patients in the 190-bed hospital.

A spokesman for Manmohan Singh said the prime minister had "expressed shock and anguish over the loss of lives". 

Barack Obama offers America a new square deal

Every time a president seeks re-election, it is something of a parlour game in Washington, DC, to ask which of his predecessors’ campaigns he will take as a template. Will Barack Obama attempt to persuade voters, as Ronald Reagan did in 1984, that the darkness of recession was giving way to “morning in America”? The enduring listlessness of the economy makes that a tricky sell. Could he perhaps emulate Harry Truman’s successful tirade of 1948 against the “do-nothing Congress”? Mr Obama is better at warming cockles than thumping tubs, and in any case control of Congress is divided, making Democrats as responsible for its ineffectiveness as Republicans are. This week Mr Obama put an end to the debate by publicly invoking a different role model: Teddy Roosevelt.

On December 6th Mr Obama travelled to Osawatomie, a small town in Kansas where Roosevelt gave a celebrated speech in 1910, laying out the platform that he would eventually adopt as a third-party candidate for president two years later. Before a crowd of 30,000 he elaborated on his longstanding theme of a “square deal” for working Americans—a concept that had made him wildly popular during his nearly two terms in office. America’s economy and political system were biased towards the rich, the former president complained; he promised to give the little guy a fair shake.