GWEN IFILL: Next tonight, as European leaders attempt to tackle their fiscal woes, Margaret Warner is examining repercussions on the ground.
Tonight, she reports from Stuttgart, Germany. I spoke with her a short time ago.
So, Margaret, you were in Belgium for us last night. Tonight, you're in Germany meeting with those -- or covering the meeting of those European leaders. What did they agree to in the end?
MARGARET WARNER: Gwen, the one concrete thing they did agree to was a new kind of budgetary or fiscal pact, they're calling it. Some call it a treaty -- 25 of the 27 members of the European Union agreed in principle to this.
And the idea is that they're going to have a tighter mechanism to ensure fiscal discipline on its member countries and punish those in some fashion who don't meet their obligations. So, as Angela Merkel, the chancellor of Germany, explained it to us last night, it sounded very tough, that if any country exceeds more than half-a-percentage of GDP in an annual deficit, it can be referred by the European Commission to some sort of European court of justice, and some automatic fines will go into effect.
But, today, as people have looked at it more closely, there are a lot of caveats. One is, it's not clear really how airtight this mechanism is. The actual language hasn't been written -- or finalized -- and won't be signed until March. And, secondly, even though these E.U. leaders, most of them, agreed to it last night, even if most of them come back in March and sign it, it has to be ratified by at least 12 E.U. member parliaments.
So, there's a lot to be done between what happened last night and this coming into effect.
GWEN IFILL: So, Angela Merkel, as you mentioned, was the driving force behind this agreement. And you're now in Germany tonight. How is it being received away from these inner sanctums where the leaders meet?
MARGARET WARNER: Gwen, we came here to Germany and we're going to Italy next week to try to see, understand why this euro crisis is so hard to resolve.
And we got a flavor of that today. First of all, the opposition parties, all the opposition parties immediately were critical saying, as they have throughout this crisis, that she's trying to drive Europe into the kind of austerity measures that will just starve Europe of growth.
However, then we went down. We were actually south of Stuttgart going to this very, very productive manufacturing area. And the few kind of ordinary Germans we talked to, they liked her tough talk, because she is expressing their values, German values, which is you don't take on debt you can't pay.
So, for instance, we were at this factory that makes gigantic tunnel-boring equipment. And I was talking to the work site manager, a man with a 10th grade education. And he said -- he was pointing to this big piece of machinery they were about to ship to Spain. And he said, the euro has been very good for us. But he said, Greece, that's a problem.
And I said, do you think that Germany, as the wealthiest country in the E.U., and other wealthy countries really just need to put in more money and rescue these countries that are having a hard time? And he said no. Then he said, but what can we do? He said, if we don't and if Greece goes, as he said, meaning default, he said, then will Spain and Portugal fall?
And so he got the whole connection. And he said that would be very bad for us. He said, we in Europe need to have a strong, united Europe to compete against the United States, he said, and China. And he said, so we really can't afford to have the euro come apart.
But he did say about Merkel, he said he liked the way she talked. And he said, I think that the other leaders respect her. And her personal popularity ratings are in fact off the charts, higher than her party's.
GWEN IFILL: And, finally, Margaret, one of the -- you mentioned the big elephant in the room is Greece and who's going to be able to fix that or turn that around, which wasn't resolved in Brussels. But I wonder whether it even matters, because there have been rules in place against what happens in Greece, saying that the debt limit has to be enforced, but nobody has ever done anything about those rules in the past.
MARGARET WARNER: That's right, Gwen. As one commentator said to me tonight, one noted television commentator, Claus Kleber here in Germany, he said, you know, it is really hard for Germans to believe that this time they really mean it.
Some of the same budget limits that were in -- that are in this new compact were in the original Maastricht Treaty. And as he said, those were violated early and regularly by many countries, he said, including Germany.
GWEN IFILL: Well, Margaret, safe travels to you, and thank you for your reports.
MARGARET WARNER: Thanks, Gwen.