By: Victoria_Marklew
The European Union has just completed its 20th “make or break” Summit in a little over two years, and actually managed to beat expectations. Two key agreements were reached on June 28-29: expanding the remit of the two bailout funds – the temporary European Financial Stability Facility (EFSF) and permanent European Stability Mechanism (ESM) – to include sovereign debt purchases and eventually direct banking sector support; and creating a unified banking regulator for the Euro-zone under the auspices of the European Central Bank (ECB). These apparently-small steps are actually quite far reaching. The Summit outcome also indicates that, faced with really significant risks – in this case, unsustainable funding pressures on the Spanish and Italian sovereigns – the politicians are still willing to make some of the compromises necessary to support the Euro-zone. In our opinion, this combination of muddle-through and compromise in the face of crisis will lead to a closer fiscal union over the coming years. However, we also think that the likelihood that Greece will not be a member of the Euro-zone by end-2013 has risen to over 60%
fu article at source: http://www.marketoracle.co.uk/Article35461.html
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