Ignis' Thomson: Sovereign debt negotiations will fail to solve crisis

Negotiations to find a solution to the European sovereign debt crisis will end in a messy compromise that fails to resolve the peripheral solvency problem, says Stuart Thomson at Ignis Asset Management.

The comments from the firm's chief economist come as leaders of 17 eurozone member states meet in Brussels to negotiate a range of stabilisation measures for the common currency, which are set to be finalised in two weeks. However, Thomson says the "labyrinth" negotiations merely prolong the agony of the solvency crisis to the next stage. "Ireland is central to the negotiations of debt burden for the small peripheral nations. "Portugal is resisting the siren calls of the EU to seek funding from the European Financial Stability Fund (EFSF) despite the rise in its benchmark 10-year y...