The real action will come at the EU summit, where there are already drafts circulating on banking and fiscal integration.
"There is a need for more specific building blocks centered around a much stronger banking and fiscal integration, underpinned by enhanced euro governance," according to a draft obtained by Reuters.
In other words: Europe is now at a critical juncture. There will need to be a decision made by each country: in or out. If you are in, you are going to have to surrender some national sovereignty. Period. That means Germany and other northern European countries sitting in on your banking and budget decision-making.
Or, as a senior Bundesbank official said yesterday: "Whoever accepts liability also has to have a right to control."
1) Mario Monti circles the wagons. Italy's prime minister met with the nation's political leaders last night and told them they must push critical economic reforms through the country’s parliament. The political consensus is already fraying: The problem is the fractious political system. There is simply too many parties; nothing gets done. How serious is it? Everyone yelled at Austrian Finance Minister Maria Fekter when she said that Italy may be the next country that needs a bailout, but Germany's finance minister, Wolfgang Schauble, said Italy had to move forward with reforms immediately or it, too, would be the next victim.
2) This caught my eye: Denmark and Sweden are easing rules for their pension firms. They're putting a floor on the discount rate that is used to calculate liabilities.
I know, sounds esoteric, but follow me on this. Government and private pension funds worldwide are having trouble generating returns to meet their obligations. Part of the problem is the absurdly low interest rates, which forces them to shore up their pension funds to meet their obligations. They need to, among other things, buy more bonds.
But what if you put a floor on the discount rate and say, hey, instead of 1 percent, we raise it to the more historically normal rate of, say, 2 percent, because we all know rates aren't going to stay this ridiculously low forever, right?
Putting a floor on the discount rate reduces their liability and means they don't have to hold as many bonds.
Instead of underfunded pensions, you can have funded pensions. Voila! Does this sound like accounting gimmickry? Well, sort of. If they're right, they're saving their pension funds a lot of grief. If they're wrong ...
—By CNBC’s Bob Pisani
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