….says Roger Bootle in a recent article, and I would have to agree with him.
Economic growth the foundation on which debt will be repaid and austerity allowed to work its magic is negative in the Eurozone. Economic conditions, on average, have been brutal over the last year and sovereign debt problems have worsened.
All the ECB has done, is said they will support bond prices, but the hard work is still to be done and the risks, far from ameliorating are likely to continue rising, at the very least, for the near future.
Lower bond yields in Spain and Italy could well mean higher yields elsewhere and we are still not 100% certain that countries like Spain will not at some point in time need to write off some of their debt.
Just because bond and equity markets have recovered strongly of late does not mean the crisis is over, because this crisis is not one of perception but reality and an increasingly strained one at that.