France, Germany Discussing Pared Down Euro Zone

German and French officials have had “intense consultation” at “all levels” in recent months about the possibility of slimming down the euro zone to its strongest members, and then more closely integrating the fiscal policies of those countries, sources tell Reuters. “You’ll still call it the euro, but it will be fewer countries,” one German official explained. “We won’t be able to speak with one voice and make tough decisions in the euro zone as it is today.”

Nicolas Sarkozy broached the idea openly yesterday when he said that a two-speed Europe—with a core euro zone sprinting ahead of the rest of the EU—was the only way forward. But the idea would face much opposition, including from some presumed core members like the Netherlands and Austria. “This will unravel everything our forebears have painstakingly built up,” one diplomat said. “It could truly be the end of Europe as we know it.” (More eurozone stories.)