Last week’s deal to save the euro has contained the problems in Greece "” at least for the moment. Now all eyes are turning to Italy as the next potential crisis hot spot. But there’s no need to go through the troubled economies of Europe one by one, trying to assess their individual prospects. In the end, there’s only one country that matters. The survival of the euro currency "” and the entire European economic system that goes with it "” ultimately depends on France.
Even in the short run, the deal announced on Oct. 27 in Brussels hardly seems worth cheering about. European leaders agreed to increase the size of the bailout fund. Banks will boost their capital, but they will largely have to raise the additional money on their own. Many private-sector holders of Greek debt will have to accept a 50% loss on the bonds they own. Expert observers say the terms are hard to evaluate, and some think the deal will fail within a matter of weeks.
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