EU finance ministers called an emergency negotiating session on the budget rules that underpin the euro after talks broke up early today with no deal on how far the rules should be relaxed.
Germany is very unhappy with the proposals as there was no explicit clause exonerating German reunification costs when measuring the country's compliance with the EU deficit rules.
Germany, the main instigator of the pact in the first place, ended up breaching its deficit limits for a third year running last year, as did France, and the battle they fought to avoid sanctions triggered the current negotiations.
Austria, one of a group of smaller countries that respected the existing deficit rules and resents those that did not, vowed to resist the suggestion that Germany would be allowed off the hook for the expense of reunification back in 1990.
The meeting discussed a document drafted by Luxembourg prime minister Hean Claude Juncker that spelled out a long list of mitigating factors that countries could plead to avoid disciplinary proceedings when they run up excessive deficits.
Let-offs could be claimed for any shrinkage of the economy - as opposed to a large contraction at present - and for deficits swollen by the immediate costs of revamping pension and healthcare systems to deal with ageing populations.
Foreign exchange fluctuations were also among the damaging factors Mr Juncker said should be taken into account when assessing why countries breached deficit limits.