This is the Cato Daily Podcast for Wednesday, February 1st, 2012.

I'm Caleb Brown.

European leaders are trying to contain the debt crisis that is crippling Greece and a few other Eurozone countries,

but it's not clear that the agreement that emerges will have much teeth.

So says Marion Tupi, a policy analyst at the Cato Institute's Center for Global Liberty and

Prosperity.

So on Monday the European leaders in Brussels held a meeting and agreed on new measures to combat deficit spending and ballooning debt

amongst the European countries. It's an agreement not a treaty because the British

have essentially blocked a European treaty on that subject.

What difference does that make, that it's an agreement and not a treaty?

Well, that is a very interesting question.

The most important difference is the following.

If you don't have an EU-wide treaty but just an agreement, then at least officially the agreement cannot be enforced by the European institutions such as the European Court of Justice.

So even though you now have this agreement on how to combat deficit and debt,

it is not at all clear whether the European Court of Justice can enforce it because

just an agreement between governments, intergovernmental agreement, cannot rely on the European institutions for enforcement.

Similarly, it isn't clear at all whether the new regulations will be followed.

After all, the European countries before they created the euro had the mastery criteria

which put limits on deficit spending and on debt and those were

then promptly ignored.

By virtue of the fact that this is an agreement and not a treaty, it actually gives this agreement less credibility than it probably

should have in order to calm investors?

...