EVEN by his own high standards, Nicolas Sarkozy excelled himself. The French president bounded out of the emergency summit of European leaders and on to a specially made-for-TV stage.

The tensions were palpable, the theatrics mesmerising. It was well past midnight and the leaders, charged with saving the euro, were getting nowhere fast after a fine Friday supper. Greece might be saved. But Portugal? Ireland? Spain? Even Italy?

Assorted weary diplomats and eurocrats in the corridors of the unlovely Justus Lipsius building in Brussels were predicting an all-nighter when the text messages started pinging and the closed-circuit TV screens flashed the message 'Sarkozy press conference'.

The summit was over. It was 12.30am. Sarkozy and his entourage swept into the French delegation's media room.

Sarkozy claimed the political leadership of the 16 members, announced a defining victory against the markets and the 'speculators' wrecking the currency. The metaphors were all martial. Europe was at war. He would not give away his 'lines of defence'. But by the time the markets opened on Monday morning, the enemy would have learned its lessons and beat a retreat.

A European Commission official added “He was shouting and bawling. The Germans were being very difficult, and not only the Germans. It was a big fight between Sarkozy and Merkel.”

A French finance ministry official said “Our beloved and fearless leader loves this kind of situation.” Merkel said that the crisis triggered initially by Greece's debt problems had called the EU's future into question — that the EU was facing its biggest challenge since 1990, the collapse of communism and the unification of Germany.

According to senior Spanish government officials quoted by Spain's El Pais, Sarkozy called Merkel's bluff on what, 48 hours later, turned into a massive financial package that has rewritten the way the single currency functions and changed the European Union in fundamental ways that may take years to play out.

“If at a time like this, with all that is happening, Europe is not capable of a united response, then the euro makes no sense,” Sarkozy told the eurozone leaders, according to El Pais. The French had Spain, Italy, Portugal and the European Commission lined up behind them. On the other side stood Germany, ranged alongside the Dutch, the Austrians and the Finns, all quietly hoping Merkel would prevail.

Sarkozy claimed the outcome as a famous victory. In fact, he had bought himself some time, with the leaders agreeing to convene an emergency session of the EU's 27 finance ministers the next day to agree the fine print.

By 2.15am on Monday, the deal was done a 750 billion euros safety net for the single currency, made up of three elements — a fast-track fund run by the European Commission, a much larger system of loans and loan guarantees from the 16 eurozone governments, with the International Monetary Fund putting up one euro for every two from the Europeans.

A decisive factor in swaying the argument may have come not from Berlin, Paris, or Brussels, but from Washington. “The Americans were complaining that there was no credibility in the way the Europeans take decisions,” said one diplomat.

Washington had had enough as the crisis threatened to spiral out of control. In Brussels and Madrid, Joe Biden, the US vice-president, privately told European leaders to get their act together. Then last Sunday, President Barack Obama went on the phone to Sarkozy and Merkel. “The 750 billion euros fund was the idea of the Americans, who insisted on the need to mobilise massive money to impress the markets and to stop bleeding confidence. That was their concrete message,” said a diplomat.

By Wednesday, with the implications of Europe's giant leap in the dark beginning to dawn, Jose Manuel Barroso, president of the European Commission, went further. Seeking to build on the recent breakthrough, he proposed even stronger measures to shore up the euro. The safety net agreed, despite German hostility, is temporary — for three years. Barroso said it should be permanent.

By Friday, however, the euro was back at its lowest point against the dollar in 18 months and leading German bankers were warning German taxpayers they would probably not get back the billions they were 'lending' Greece.

— The Guardian, London