By Andrew Smith, Chief Economist

Unfortunately, December’s “last chance to save the euro” summit agreed measures supposed to avert a future sovereign debt crisis, rather than defusing this one. Instead of the wished-for comprehensive package to, first, support government debt markets, second, recapitalise troubled banks and, third, restore competitiveness and growth to the peripheral economies, we got a “fiscal compact”.

By Andrew Smith, Chief Economist

Two days spent at an economists’ round table discussing the future of Europe has done nothing to calm my nerves. The general tone was that the crisis has worsened significantly in the past few months and some participants, who had previously argued that the situation was salvageable, now fear disaster.