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Cause & Effect

 
So, in Greece and Italy the technocrats are now in charge - well sort of - but what difference does it make?

At the margins? Some.

But read Wolfgang Munchau's (Monday's FT) 'The only way to save the Eurozone from collapse' ......And face the reality.

Some sort of pseudo-ECB-backed-Eurobond has always been the only solution, but Merkel (perhaps correctly) continues to dismiss the idea and the ECB (as they told you so) is determined to demonstrate they are near their bond buying limit.

Meanwhile, the prospect of meaningfully leveraging the EFSF is diminishing by the day, the whole notion of 'expansionary austerity' is a non-sense, Europe is hurtling towards recession and bond yields are creeping ever higher.

Given Merkel's party congress rhetoric its easy to assume that the so-called 'hard core' are now planning for hard exits. That sounds politically plausible (if legally impossible) but I suspect they know not what they do.

Europe is sliding towards dangerously unintended consequences