The real outcome of the European summit was that Merkozy -- as Europe is calling the Franco-German duo of French President Nicolas Sarkozy and German Chancellor Angela Merkel -- failed to come up with a minimum program to save the euro. They did enough to kick the can down the road another few weeks but no more.

The rather better news is that they, or rather the European Central Bank, may have done just enough to save the troubled European banks.

First, they agreed they would impose no more haircuts, of the kind imposed on holders of Greek bonds. Second, they cut interest rates. Most important, the new head of the bank Mario Draghi made it clear that if the bank didn't have the mandate to be the lender of last resort for sovereign debtors (member states like Greece or Portugal or Italy) it could play such a role for Europe's troubled commercial banks.

They might well need it. The European Banking Authority last week said that Europe's banks needed to increase their capital by another $150 billion. Since bank shares are so low they can hardly do this through issuing stock, the banks will do it by reducing their lending, which means less growth just as Europe is sinking into a renewed recession.

The real question remains whether the ECB will exceed its mandate and provoke a constitutional crisis in Germany by bailing out the sovereign debtors. So far they are doing so discreetly by buying on the secondary market; that is buying them from banks that are desperately trying to get this flawed Greek, Italian and Spanish paper off their books. They are doing so to the tune of $27 billion a week. If they keep it up for a year, that is more than $1.33 billion. At some point, Germany's constitutional court is likely to notice.

The crunch is likely come early in the new year. By the last week in January, Italy has to roll over some $40 billion in debt, with another $60 billion to be rolled over in the last week of February. Spain has to roll over $60 billion by the end of February. France has to roll over $160 billion by the same date.

That is more than $300 billion. There are no buyers in sight. The European Central Bank has repeated that it cannot act as lender of last resort to member states. France is likely to have its debt downgraded by the ratings agencies by then. And should they find a fairy godmother by Feb. 28, those three countries have to find another $150 billion by the end of April.

What did the EU summit actually achieve? They agreed automatic sanctions for any country which runs up a deficit of more than 3 percent of gross domestic product, with intrusive mutual examination of each member state's budget to prevent a repeat of the way Greece repeatedly cooked its books.

They agreed to launch the $669 billion euro European Stability Mechanism, a permanent bailout fund, by next spring, a year ahead of schedule. They also pledged to lend the International Monetary Fund up to $268 billion to help it tackle the EU debt crisis.

(This could yet break the whole deal. The Polish opposition Saturday pointed out that Poland's share of this IMF money would be about $26.8 billion or 110 billion zlotys, which is roughly one-third of the Polish government's annual budget. Since funding this would breach Poland's constitutional limit on debt, this isn't going to happen.)

That was it. There was no agreement to issue common eurobonds, which the markets might have taken seriously. There was no pledge of fiscal transfers from countries like Germany and Holland, which are in permanent trade surplus with their European partners.

There wasn't even discussion of a common EU Treasury and no agreement to seek a banking license for the ESM rescue fund, which might have increased its firepower.

Above all, there was no shifting in Germany's insistence that the European Central Bank isn't like other central banks; it has no right to act as a lender of last resort.

In short, they met one (maybe 1 1/2) of the five clear objectives that will be required to save the euro.

The first is to stabilize the bond market by guaranteeing sovereign debt rollovers for all eurozone members for at least two years. They may think they have gone halfway to doing this but on current trends their $669 billion ESM warchest is likely to be exhausted even before it is launched.

The second is to restore confidence by enacting strict budget discipline rules. This they have done. But since Germany and France each broke the last set of such promises, under the ill-fated Growth and Stability Pact, five separate times, there isn't much reason to believe them this time.

The third is to agree and commit to a growth strategy that will focus on youth employment. This may be the most important failure. The only way to manage the debt burden is to grow out of it. But instead of a strategy to restore GDP growth, the eurozone at Germany's insistence is demanding more austerity, which means a static or shrinking GDP. This will make it less and less possible to repay the debt, while creating a lost generation of jobless young Europeans.

The fourth is to address the internal balance of payments or the crisis will return even if the current debt drama is resolved. As long as Germany is running a massive trade surplus with its eurozone partners, those partners have to go into debt to pay for the German goods. After all, one country's trade surplus is another's trade deficit.

The fifth, and perhaps most critical for the long term is to redefine the social contract, designed for an age when life expectancy was 70 years or less, for the new reality when European life expectancy is 80-plus. Growing longevity means bankruptcy for current health and pension systems.

In sum, the European summit ducked the big issues, only partly addressed the immediate crisis, condemned themselves to more austerity but probably all felt better by taking out their frustration on the Brits.