Why the current rescue plans in Europe will fail

Eurozone rescue plans may flounder in tehir current form as they do not address the core problems facing the region, Capital Economics has warned.

While Germany last week approved the latest bailout plan – The European Financial Stability Facility (EFSF) – Capital Economics said even if it is given the green light by all the nations across Europe it would be unlikely to go far enough. “Policymakers might finally be considering the bold steps that would be required to save the euro,” said Jennifer McKeown, senior European economist at Capital Economics. “But the plans might not ever come to fruition and, even if they do, they do not address all of the fundamental problems facing the most indebted economies.” Last week investor...