Redwood: Eurozone still has unfinished business

The EU summit on 4 February passed off with surprisingly little drama. The EU nations for once decided to avoid interesting public rows on the future of the euro.

The two big items discussed were energy and innovation; topics which did not set the pulses racing. There had to be a diversion to talk about Egypt, though few think the EU’s views on the politics of that country will have much impact on anyone. Beneath the surface though, there are important things happening. The EU has settled on a strategy for propping up the euro, forged in the furnace of market crises affecting Ireland and Greece. The summit confirmed there will be “ambitious” new stress tests for all EU-regulated banks. This becomes a problem when we get nearer to seeing the result...