More sticking plaster when a permanent solution is needed

Outlook

The financial media just loves a crisis, and the situation in Greece is one that actually lives up to the meaning of that over-used word. However, while Europe’s stock markets spent the day firmly in the red, it was hardly a rout.

Markets were left shaken, quite seriously the further one moved from the eurozone’s core. But they weren’t quite stirred into a panic sell-off. Perhaps that was because the prevailing feeling is that some sort of deal will eventually be done.

The EU’s critics may decry it as dysfunctional but it has shown its ability to avert disaster on more than one occasion. It will probably do so on this occasion if only because the consequences of not doing so are simply too dire to allow.

The trouble is that whatever emerges from the current mess will still represent a sticking plaster applied to an open wound.

Its heads need to be brought together to formulate a longer-term solution, and that almost certainly has to involve some level of debt forgiveness. The problem is that those heads may need banging together and it is not altogether clear who might have the leadership to do that.