Economist and former Reagan adviser Martin Feldstein says the much-vaunted eurozone summit failed on two counts.

"It failed to achieve the increased European political integration that was the primary goal of German Chancellor Angela Merkel and the other European political leaders," Feldstein writes in The Wall Street Journal.

"And it failed to improve the outlook for eurozone sovereign bonds because those politicians continued to insist that only a fiscal union and political integration could limit the interest rates on sovereign debt."
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There's no way to enforce the new budget rules, even if all of the eurozone governments agree to sign a new accord, says Feldstein.

Martin Feldtsein (Getty Images photo)

"The result looks like a replay of the old Stability and Growth Pact that had similar goals and penalties but was soon violated by Germany and France and then watered down to be completely ineffective," he says.

"The Merkel-Sarkozy team should recognize that they have been on the wrong track. Europe needs country-by-country fiscal reforms and not a renewed push for a fiscal union and political integration."

However, interest rates on the sovereign bonds of Italy, Spain and other can still be lowered. "Those interest rates can be reduced by individual country policies to bring down current and future budget deficits," Feldstein says.

Reuters reports that Italy's funding costs reached a new euro era record at auction, piling pressure on the new Rome government after last week's EU summit failed to convince markets the bloc's debt crisis can be resolved.