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Analysis: No "grand bargain" means more euro stress

Analysis: No “grand bargain” means more euro stress
Reuters – 3 minutes 7 seconds ago.. .
By Noah Barkin

BERLIN (Reuters) – The euro zone has agreed to take a big leap forward in economic integration, but failed to deliver a convincing answer to investors worried about its ability to tackle threatening debt crises in Italy and Spain.

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As a result, the deal clinched by European leaders in the early morning hours of Friday seems unlikely to ease the intense financial pressures that have plagued the currency bloc for over two years. Nor will it dispel concerns that the euro area could eventually break apart, with one or more countries exiting despite the catastrophic consequences that would entail.

With Britain, the EU’s third biggest economy, opting out of the fiscal process, questions about the cohesiveness of the wider bloc will also be posed.

“It’s not the grand bargain some people had been hoping for,” said David Mackie, an economist at J.P. Morgan in London. “A door has been opened with the IMF channel, but some people may say that 200 billion euros is simply not enough.”

http://finance.yahoo.com/news/Analysis-No-grand-bargain-rb-3832550140.html?x=0

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