Confronted with an existential crisis for the euro, European leaders in the early hours of Friday morning in Brussels kicked the can further down the road than usual.

But once they absorbed the small print of the vaunted "historic agreement," which bails out Greece with nearly $200 billion in new financing, the markets shed their initial relief and prices fell again. The word from analysts at Barclays was that the deal did "more than expected but not enough to make us sleep comfortably."

As one currency market commentator put it, "This is a plaster cast rather than a Band-Aid." But the embattled euro countries really need a full-scale operation.

The summit deal tackles the problem of Greece and sets in place mechanisms that could help bail out Ireland and Portugal, if necessary. But there is nothing like enough new money to calm the fears of the markets that Spain and, above all, Italy are also heading for the eurozone's intensive care ward.

Everything rests on the European Financial Stability Facility, capitalized at $550 billion, which is enough for the three small countries but not sufficient to tackle Spain or Italy.

There was nothing in the deal to tackle Europe's core problem. German industry is so competitive and so efficient that the country is running a permanent trade surplus with almost all its neighbors. Germany voters worry about a "transfer union" in which they bail out their less-efficient partners.

But Europe's real transfer union is Germany's $200 billion annual trade surplus.

Greeks, Italians, Portuguese and the Irish all let their labor costs soar over the past decade and saw scant gains in productivity, while the disciplined Germans swallowed wage restraint and saw their unit labor costs fall.

While this continues, the eurozone will lurch from one crisis to the next.

It was telling that the initial draft communique from the summit, shared with journalists around midnight, referred to "a European Marshall Plan." This phrase was dropped from the final version, a signal that even the EU leaders were wary of over-hyping the deal.

There are four other significant problems with Europe's latest deal to save the euro.

The first is that, as the markets (and this columnist) long predicted, Greece will default on its current sovereign debt. The plan is that the default should last only a few days and Greece then issues new bonds, which will be backed by the EFSF and will thus be seen as sound and worthy of approval by the ratings agencies. Hey presto, the default is over.

That is the theory. In practice, the ratings agencies and the once-burned, twice-shy bond markets may not take so forgiving a view, particularly since the new deal requires private investors to come up with another $50 billion.

The second problem is that a lot of the small print, including the sums and mechanisms to come from the private sector, has yet to be written. The plan for Europe to send in its own financial prefects to whip the Greek economy into shape is so far no more than a sketch and the Greek Parliament has yet to agree to such an imposition.

The third problem is that this new scheme has yet to get through the gauntlet of various national parliaments, many of them with majorities bitterly opposed to any more bailouts. And it has also to get past the German constitutional court, which is already sitting on judgment on legality of Germany's role in the bailouts so far. Bear in mind that the core treaty on European Monetary Union actually forbids bailouts to member states in trouble.

The fourth problem is the United Kingdom, which isn't a member of the eurozone but as a member of the EU would have to approve that part of the new deal that involves the International Monetary Fund. And in the very likely event that the latest deal requires an amendment to Article 125 of the EU's core treaty, which forbids moves toward fiscal union, Britain would hold a veto.

As British Prime Minister David Cameron told his own members of Parliament last month, this means "a historic chance to renegotiate Britain's relationship with the EU." At the least, he would want to keep European regulators out of the London financial center and out of Britain's labor markets.

So any euphoria about Friday's European summit should be placed on hold. The real achievement, described by French President Nicolas Sarkozy as "a qualitative jump in the governance of the eurozone" remains to be tested in the various national parliaments.

It is one thing for Sarkozy to proclaim, "We have agreed to create the beginnings of a European Monetary Fund." It is quite another to make it stick, when the markets are already driving Italian and Spanish interest rates higher and the hopes fell yet again of a deal in Washington to avoid a debt default by the United States.

In one of the silliest pieces of commentary, Germany's Die Tageszeitung wrote in an editorial: "A new epoch has begun in the history of the euro. There were three remarkable developments at the EU summit in Brussels. First, the European Central Bank was deprived of its power. Second, no more respect will be paid to the ratings agencies. Third, it is only a matter of time until euro bonds are used across the board. All three developments are worthy of embrace. They are also unavoidable if the euro is to survive. In the long term, this means that the euro zone is declaring independence from the financial markets. That is a historic step."

Anyone who believes that the euro can declare such independence needs medical attention. The real bottom line is that this is the euro-crisis that Europe's federalists wanted all along to further their grand project of a European super-state.

Former EU Commission President Romano Prodi, than man who steered Italy into the euro, put it best when he told the Financial Times in May: "When the euro was born everyone knew that sooner or later a crisis would occur. I was warning years ago that, through no one's fault in particular, extraordinary events could occur that would force joint co-ordination of fiscal policies."

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