How to solve the eurozone debt puzzle

Europe’s policymakers had always hoped that by bailing out Greece, Ireland and Portugal, the crisis could be restricted to these relatively small economies. This strategy has clearly failed and the measures taken at the recent summit recognise this fact. Slow progress The future shape of the eurozone will likely be determined by how events unfold in Italy and Spain. Investors are generally making the assumption that what happens today in Greece in terms of bailouts and haircuts on bonds could happen tomorrow in Italy or Spain. Both countries are making efforts to reduce their ...