European leaders that participated in the EU summit yesterday and the day before agreed to a rebuilding of the European Union (EU) that consecrates budget austerity, widens the gap that has traditionally separated the United Kingdom from the Old Continent, and it remains to be seen if it will serve to free the European Central Bank (ECB) from the corset restricting its ability to take action in the debt market and blow speculators to smithereens.
After a hesitant start, yesterday markets rebounded slightly and finished up on the day generally on hopes that an agreement in Europe would add another piece to the effort to build fiscal discipline in Europe and the ECB can ease their fears that prices will shoot up in the near and mid term.
If the guardians of the political economy in the eurozone feel that their governments have lightened a substantial portion of their debt in line with mandates to do so, barring inflation, it will start to focus on propelling growth and upholding a policy of low interest rates, providing liquidity for the banking sector, and stabilizing the debt markets of countries on the point of collapse such as Spain and Italy.
