Although the EU Summit has come to a close this week, it’s still hard to see whether the Eurozone has the tools to rid itself of its crisis. The U.K. has decided not to agree to the new EU treaty, creating some discord among the 26 other European members who agreed.
However, greater problems are still at hand, especially whether European banks can be adequately recapitalized, a reoccurring concern this week, and whether Europe can generate the necessary financial firepower to begin eliminating the debt of countries such as Italy and Spain among others.
The ECB has had to step up and act beyond its traditional scope as of late to keep borrowing costs down while trying to improve liquidity. How long this can go on without external intervention remains to be seen.
The interview below considers a possible outlook for Europe in the wake of the new treaty changes and if we can stay optimistic in the long-term.