© EPA President of the European Council, Belgian Herman Van Rompuy: I am your leader. You have no choice in the matter. This is fascism by stealth.
The European Union has backtracked on plans to create an "economic government of the European Union" following protests from Britain.

Backed by Ireland, Sweden, the Netherlands, Poland, and the European Commission, Gordon Brown told an EU summit dinner in Brussels late last night that the term, contained in a Franco-German bail-out plan for Greece, was contentious and had to be changed.

Today the revised wording - with "government" altered to "governance" - will be endorsed in summit conclusions designed to signal to global financial markets that the euro is stable and will recover from its current slump.

The hope is that the bail-out pledge will never be invoked, and that the declaration of a safety net will in itself be enough to rally investor support for the euro and end its slide.

Summit chairman Herman Van Rompuy said after the 16 eurozone countries approved the wording at the end of the summit's first day: "We hope that we can reassure all Greek bond holders that the eurozone will never abandon Greece."

Comment: Which is precisely what the EU is doing by inviting the IMF to select the finest chops from the Greek carcass.

The non-eurozone nations, including the UK, will not be asked to contribute to any bail-out, but have also formally approved the terms of the deal - now that the vital wording has been amended.

The original stated: "We commit to promote a strong coordination of economic polices in Europe. We consider that the European Council (EU leaders) should become the economic government of the EU and we propose to increase its role in economic surveillance and the definition of the European Union growth strategy."

The implied lost sovereignty was too much for British officials, who explained the difficulty to their French and German counterparts.

It was suggested that the word "governance" would be less controversial, because "governance is about the way you do things, but it is not about new institutions or structures".

Mr Brown's spokesman said: "There is no question of ceding power to Brussels. This is about better coordination of everyone's economic policies in Europe."

At a press conference Commission President Jose Manuel Barroso said the wording now stated that Europe "must improve the economic governance of the European Union".

The final version sets out a mechanism for bailing out the crisis-hit Greek economy if necessary, including a "substantial" contribution from the International Monetary Fund, but the "majority" from eurozone countries who pledge themselves "ready to contribute to coordinated bilateral loans".

The document does not mean the immediate activation of a new bail-out scheme, following German Chancellor Angela Merkel's insistence that Greece should only be bailed out as a last resort, when all other avenues of financing its huge deficit were exhausted.

If and when activated it would involve finding more than ยฃ20 billion between the eurozone countries, on a voluntary basis.

Who would agree to stump up how much is not under discussion at this stage, and eurozone countries would be expected to contribute on the basis of their respective capital vested in the European Central Bank.

Mr Van Rompuy said: "This is a political text giving a political signal. When there is a demand for help (from Greece) then there will be an assessment about whether the mechanism is to be put in place."

On the use of "government", he pointed out that the English language version had been changed, but in French the word remains "gouvernement".

He observed: "There is no fundamental difference of view, but rather a sensitivity to certain words which has led to an asymmetrical translation."

President Barroso commented: "We have shown that where there is a will there is a way - and it is the European way."

Comment: Which is the same way as the Neo-liberal Washington Consensus way, institutionalised "laissez-faire" capitalism (for the vultures) and austerity measures (rationing, increasing taxation and all manner of social controls) for the people.

Before the summit ends later today, EU leaders will discuss how to make progress on tackling climate change in the wake of last December's international Copenhagen gathering which failed to deliver binding targets for cut CO2 emissions.

The Brussels summit conclusions will also formalise the EU's 10-year plan for economic recovery built on jobs and growth by 2020.

But the pledge to bail-out Greece will be seen as the real success of the meeting - as long as the gesture restores the euro's credibility.