Time someone else took the hits
Regaining financial control is possible now that Europe has bigger issues, writes James Fitzsimons
The prospect of stabilising the economy in 2012 is hopeless unless the EU comes to its senses and fixes its own problems. Greece is a hopeless case. Spain and Italy might have some early success in selling government bonds but it will be short-lived, while the EU banking model remains in tatters. We can't even be certain that the EU will give us the money we need to stay afloat. If Spain and Italy cannot source funds in the open market the EU will be put under more financial pressure than it can cope with. If that happens the US and even China will have to step in to prevent a total collapse. But at that stage the European banking model will have failed and even Germany will be in trouble.
Last year Greece and Ireland dominated the headlines. The Irish banking system has been propped up with the help of the ECB. But it is not stable. The plan was to focus attention on the peripheral countries while banks in other EU countries consolidated their position before the contagion was seen as widespread. By late summer the plan had failed.