The lack of talk on a Eurobond, the belief that the EFSF is big enough and the proposal for a financial transaction tax is what disappointed our market as Europe is of course closed. The euro did rally though back to unchanged as Merkel and Sarkozy did propose a Euro Zone Economic Council which implies they want a more coordinated fiscal policy amongst all the members to have some economic union and to have better supervision over the less disciplined. More fiscal economic policy cooperation is what the euro missed during its existence as the only coordination was with the ECB and monetary policy. But, this of course falls short of the Eurobond that some hoped, unrealistically I believe, for today as the Germans are going to have to have a real introspection of how much they want to extend themselves for the rest of the region.
