| 13.1°C Dublin



Let's prepare for the long stay at rock bottom

THE endgame for the eurozone is approaching. Italy and Spain are avoiding bond market expulsion only because the European Central Bank keeps the lid on the interest rates they face through purchasing bonds in the market. But the same ECB is unhappy with this policy, regards it as temporary and misses no opportunity to remind the market of its lack of commitment. If you are the little Dutch boy with his finger in the dyke, best not to keep shouting: "My finger hurts! I'm a coward!"

Bond investors have shouldered enormous losses, particularly those credulous enough to believe in the pseudo-solutions from innumerable European summits. They are thoroughly spooked by talk of a smaller eurozone, threatening Greek-style losses for holders of bonds issued by countries next on the list. The result has been a sell-off that spread last week from Spain and Italy to 'core' eurozone countries including Austria and France.

Most Watched