Battle lines are drawn as EU states and the markets square up

A potent mix.

Ask any writer of bodice-ripping novels.

And any historians worth their salt.

The past few weeks in Brussels have witnessed the clash of these powerful titans. But it’s not a straightforward battle between money and power, but between two groups that have both. On the one side are sovereign states and on the other – let’s simply call it the markets on the understanding that it takes in the structures and personnel whose game is money.

Anybody who thinks this is something related to a lost job, a longer queue for medical treatment, the loss of half your pension investment, having your work for future decades in hock is right.

It is also about the amount of power any one sector exerts and it is having much wider implications, such as who rules Europe.

There has been a power vacuum in the European Union for some time. At the beginning of the project, the six countries agreed the European Commission would be responsible for the EU entity and referee between the member states.

But with the influx of many more countries who were less trusting of the system, the ground was ripe for the subjugation of the commission.

The willingness of Commission President Jose Manuel Barroso to appease the member states facilitated the change, and the reorganisation of the institutions post-Lisbon Treaty has hastened it.

However the economic turmoil of the last two years, and in particular the threat to the euro of the past few months, has been a turning point.

Initially Germany dragged its heels, in thrall to some facets of its national identity such as thrift and discipline.

Now the penny, or rather the cent, has dropped and Chancellor Angela Merkel is setting the pace, naming the battleground and setting out the ground rules. The war is no longer her hard-working German citizens pitted against the Greeks, but governments against markets.

The economic crisis has galvanised the EU, but rather than relying on the commission to spearhead and carry out changes, national leaders and finance ministers have taken the matter into their own hands. They are not just taking the decisions but are now seeing them through – rather than leaving it to their experts and diplomats or to the commission and the pace is being set by Germany.

Interestingly, Chancellor Merkel does not trust either her fellow EU members or the commission. She has virtually excluded the commission from many of the measures being agreed to deal with the markets and especially the economic governance of the member states. And she has tied the hands of member state leaders when it comes to imposing conditions on countries that need eurozone loans by making the IMF the referee.

Her sights are set on amassing the weight of the EU for a gigantic push against the unfettered operation of the markets through the G20. She reminded people that 18 months ago the G20 promised to deliver on this and people were entitled to ask what has been done since.

The answer is, in some ways, very little, but in other ways quite a lot. The EU and its French Internal Market Commissioner has a long list of measures it intends to achieve this year. It is being matched by the US, where suddenly voter anger against the markets has convinced politicians facing the electorate this autumn to act.

The battle is raging all around – not least in the media where specialist business services are concentrating on the sins of Greece and of the politicians in an effort to ward off bans or regulation of what is betting in a virtual world using our real money.

And all the time the battle for who rules the EU is being better defined as Germany shows leadership – aided by a France happy to provide a sharp tug here and there to kick the more silly ideas out of play. Changes, even in the EU, come hidden in battalions of problems, as usual.