Jeffrey: Where are the flaws in Europe's OMT plan?

RICHARD JEFFREY

Richard Jeffrey, CIO at Cazenove Capital, questions whether the latest moves in Europe to tackle the crisis and bring down soaring bond yields can really solve the problems facing the southern countries.

Inexorably, but with excruciating lack of speed, the eurozone appears to be making progress towards finding a short-term solution to its crisis. The German Constitutional Court's rejection of the challenge to the European Stability Mechanism was another hurdle passed. Following this, market focus will probably return to the ECB's affirmation that it is willing to buy as much peripheral eurozone debt as is necessary to force a return in yields to more normal levels. Before Outright Monetary Transactions (purchases of bonds) can take place, governments must have requested support from t...