France and Germany were locked in their worst showdown of the three-year euro crisis on Thursday evening, split between two conflicting approaches, with Berlin leading the charge for draconian new centralised powers over national budgets and Paris spearheading a campaign for quicker and easier bailouts of struggling countries and banks.

French president François Hollande, appearing at only his third EU summit in Brussels after having thrown down the gauntlet to Angela Merkel this week in an interview with the Guardian and other European newspapers, flatly dismissed German demands for a new European “budgets tsar” who would be able to overrule national governments and parliaments on tax-and-spend policies in the eurozone.

“The topic of this summit is not the fiscal union but the banking union, so the only decision that will be taken is to set up a banking union by

Read more: France and Germany divided over European economic policy | World news | guardian.co.uk.