What needs to happen next for the eurozone?

EUROZONE

For the first time in what seems like living memory, investors are more worried about the US than the eurozone.

The latest Merrill Lynch Fund Manager Survey found more respondents concerned about the US fiscal cliff than the eurozone’s well-rehearsed problems. In addition, of course, the ECB has capped a spurt of activity (LTROs, interest rate cuts) with the creation of the OMT (outright monetary transaction), which for the first time used the talismanic word ‘unlimited’. Consensus now seems to think the extreme situations posited as recently as June of outright collapse of the eurozone or disorderly default have been taken firmly off the table – at least for now. Markets moved swiftly to price th...