So the moment has finally arrived. After months of nervy wrangling and continual ratings downgrades of European states, we appear to be on the brink of a 'grand bargain' to rethink the EU.

The deal stitched together by Merkozy in Paris on Monday puts the German Chancellor firmly in the driving seat.

How quickly Sarkozy has folded but his eagerness to do a deal is more about real concerns about the stability of the French financial system this side of a spring re-election campaign.

While the Elysee Palace tete a tete was taking place both leaders will have received news of the planned ratings downgrade of France and Germany and the rest of the eurozone.

Well after that watch out for more EU action against the rating agencies.

So Angela Merkel is set to table a new EU Treaty in Brussels on Friday. A new Treaty means a new kind of EU - one set to bind together the 17 Eurozone members ever more tightly.

But the voters will have something to say about that as any new Treaty will need to be ratified in every member state.

And that may include the UK if the Treaty is EU wide. I don't see how it can not be?

The timetable for Treaty will also need to be known. March I'm told.

Which brings me to the UK.

Up until now David Cameron has been able to call for his big bazooka to sort out Europe - and do so almost safe in the knowledge France and Germany would not be able to work one out.

Now the bazooka is being primed and is almost ready to fire.

So the spotlight now turns to the UK. The Prime Minister has already said he would not block a deal to save the Euro. He knows the Euro blowing up would be calamitous for Britain.

But as he sits down in Brussels later this week he knows this is the point of greatest leverage in the negotiations.

Emboldened Eurosceptic Conservative backbenchers are already reminding Number 10 of that.

So with that in mind - what should be David Cameron's stance?

He has already talked about using the negotiations to oppose any planned Tobin tax and to take more powers back on financial services.

That's a good start - but the Prime Minister needs to have a more fully fleshed out strategy. Not a shopping list as such but a series of initiatives where the UK should look for more autonomy.

Certainly he should look to give a major impetus to the single market and remove current barriers to trade.

My concern is that the UK agenda is not sufficiently fleshed out and the clock is ticking.

I hope the midnight oil is burning in Whitehall this week - the chance will not come again soon.

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