Eurozone: Are the building blocks falling into place?

On the face of it, September 2012 was a good month for the euro. For once, market expectations were met. The European Central Bank (ECB) belatedly opened the way for action to address the ruinous polarisation of government borrowing costs in the eurozone.

Germany’s Constitutional Court removed the last obstacle to the deployment of the European Stability Mechanism. The European Commission put forward proposals for a eurozone banking union. And Dutch voters resisted the clarion call of political populism. Will the market rally that greeted these developments be sustained, or will it prove as transient as previous ones? Cautious optimism is warranted, but more is needed to convince investors of the irreversibility of the euro.

• Primary Source

ESO: Background information: ECB to face biggest test on euro gambit http://www.europeansources.info/record/ecb-to-face-biggest-test-on-euro-gambit/

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