If any country in the European Union has historical reasons to fear the consequences of handing greater power to Germany it is Poland. Yet the eurozone is now so vulnerable, its banks so fragile, its economy so weak that Poland’s foreign minister Radek Sikorski said in Berlin recently: “I fear German power less than I am beginning to fear German inactivity.”

Such sentiments are the backdrop to Angela Merkel’s latest proposals to save the single currency from disintegration. These will involve getting the upcoming summit in Brussels to agree to greater fiscal integration, in which countries will be able to set their own budgets but need to get them approved by the other members of the eurozone, the European Commission and the European Central Bank.

The Merkel plan does not mean full political union but it would involve a big loss of sovereignty. It is the equivalent of teenagers only being allowed out if they tell their parents where they are going, who they are going with, and what time they are returning home.

France would find the strictures hard to swallow at any time; with a presidential election looming next year, Nicolas Sarkozy will be aware of the political dangers of giving up too much.

As, almost certainly, will other members of the club when the moment comes to lose some of their control over national budgets. But for the moment, the eurozone has stared into the abyss, and even those countries that are not part of monetary union — such as Poland and the UK — are aware of the risks.

They know that the intricacies of German domestic politics mean that Merkel cannot sanction a far more-proactive approach by the European Central Bank without the rest of monetary union accepting a strong dose of teutonic fiscal discipline. The ECB action would involve the buying of Italian and Spanish bonds in the short term, the development of common eurozone bonds in the longer term.

Financial markets like the idea that the eurozone is getting its act together, because the costs of a disorderly break-up are so high. Dealers desperately want to believe in the German plan so bond yields fell in Italy and Spain on Saturday on expectations that Sarkozy and Merkel will settle any remaining differences on Monday, the ECB will cut interest rates on Thursday and the Brussels summit will agree a Grand Bargain on Friday.

In policy circles, the threat of deep recession that would follow euro fragmentation appears to have concentrated minds. It is, though, too early to claim victory. Firstly, there has been talk before of master plans and big bazookas. None of it has come to anything. Secondly, the plan still looks quite sketchy. Thirdly, there is no guarantee of buy-in from member states should the details of the plan be inked in over the coming days. — The Guardian, London