Colm McCarthy: Summit offers a decent chance of saving the euro
A decent day's work as EU finally recognises responsibility for bank debt is too onerous, writes Colm McCarthy
When a big eurozone country got into serious trouble in the bond market the game was always going to change. That is the essential message from the Brussels summit.
Full responsibility for private banking debt was forced on to the Irish government's balance sheet by the European Central Bank in October and November 2010. This formula could not be imposed on Spain, which would have been forced from the bond market, to be followed inevitably by Italy and the likely collapse of the common currency project.
The applications of Spain and Cyprus for financial aid bring the number of distressed eurozone sovereigns to five, out of a total membership of 17. The reality is finally being acknowledged that there were serious design flaws in the eurozone and that the system needs to be re-engineered.