PARIS - European Union leaders face two months of tough bargaining on money, power and the future governance of the euro zone before they can boost confidence that the existential threat to the single currency has faded.

The European Central Bank's pledge to buy the bonds of struggling euro zone countries in unlimited amounts has changed the terms of Europe's debt crisis.

Yet French President Francois Hollande may have been a little premature in declaring a turning point last week after another night of summit negotiation yielded a deal for a euro zone banking regulator to be launched next year.

"We are on track to solve the problems that for too long have been paralysing the euro zone and made it vulnerable," said Hollande. "I again have confirmation that the worst is behind us."

More nights of horse-trading lie ahead between now and mid-December in which EU states must agree on a common budget for the next seven years, closer fiscal union with more intrusive central supervision of national budgets and a possible separate budget for the euro zone, and more support for the most vulnerable euro states.

They will need to decide how to keep Greece afloat if, as expected, it reaches a deal with international creditors to avoid bankruptcy next month in exchange for more drastic spending cuts and structural reforms.

And they may face months of uncertainty over whether Spain, which has already been promised up to 100 billion euros in loans to recapitalise its ailing banks, can avoid a sovereign bailout.

Above all, the euro zone is a long way from returning to the levels of economic growth needed to make its debts more manageable and get millions of angry unemployed back to work.

For now, the financial market turmoil that threatened the very survival of the currency area a few months ago has abated, at the risk of lulling EU leaders back into complacency over what remains to be done.

The European Central Bank removed that acute sense of crisis by agreeing to buy unlimited quantities of short-term bonds of troubled euro zone countries that apply for a rescue programme and accept strict conditions. 

"The state of urgency we had over the summer is just not there to the same degree," said a senior EU official who has been present at every night of summitry since the crisis began in late 2009.

"There is not the same sense of having our backs to the wall," he said. "One should know from the way politics works in the European Union that you need a certain sense of crisis to act -- that's the way it works."

Big three ties at low ebb

Complicating the next few weeks of negotiation, relations among Europe's three leading powers - Germany, France and Britain - are as difficult as at any time for a decade.

The collapse of a proposed aerospace mega-merger between European Airbus manufacturer EADS and British defence company BAE Systems over government stakes underscored the depth of mistrust between Paris, Berlin and London.

Within the euro zone, Germany and France remain at odds over the balance between central EU control of national budgets and economic reforms, and mutualising risks and liability for each others' debts and bank deposits.

Hollande argues Germany must first take steps he sees as vital to underpin vulnerable countries' government borrowing and financial institutions before France will agree to yield more sovereignty to Brussels over its fiscal and economic policy.

German Chancellor Angela Merkel seems determined to avoid any new liability for German taxpayers which would require her to seek approval from her increasingly reluctant parliament before a September 2013 general election.

That may explain why she insisted that euro zone rescue funds could not recapitalise any bank until a euro zone banking supervisor is fully operational late next year, and there would be no retroactive direct recapitalisation of banks.