A chink of light

As siren voices warn that the eurozone has only ten days to be saved, a chink of light that might just work and buy time for the eurozone and the EU to sort themselves out.

The light emanates from the decision of central banks to take the initiative to ease liquidity in the banking system:

See:
http://www.telegraph.co.uk/finance/financialcrisis/8926014/Central-banks-act-to-ease-eurozone-credit-crisis.html
http://www.bankofengland.co.uk/publications/news/2011/138.htm

Quote from the Daily Telegraph:

Cutting swap costs is the equivalent of interest rate cuts. These banks are now basically providing unlimited US dollars to banks with which to fund themselves. The banks will be hoping this is a turning point in the crisis.
We do not know what caused this decision, we may never know, but the smart money is on the fact that yields on one-year German debt went negative this morning (paying Germany to lend it money).
This may have been a signal that the money markets were a short shove away from complete collapse.

So whilst the politicians dither the central banks come up with a co-ordinated response.

Meanwhile back in disneyland the politicians continue to fret and disagree.

http://www.telegraph.co.uk/finance/financialcrisis/8925250/Ten-days-to-rescue-euro-as-leaders-call-for-IMF-funds.html
http://www.spiegel.de/international/europe/0,1518,800762,00.html
http://www.spiegel.de/international/europe/0,1518,800700,00.html

Two interesting interviews:

http://www.spiegel.de/international/europe/0,1518,800351,00.html
http://www.spiegel.de/international/europe/0,1518,800421,00.html

Obviously the intervention of the central banks of itself will not save the euro, but it takes some pressure off the banks, improves sentiment in the markets and may be an element of the key to boost the EFSF.  However the role of the ECB has still to be resolved.

All the financial manoeuvring does not resolve basic problems within the eurozone.  Structural changes are essential, not only in eurozone membership, but also how the EU/eurozone manages financial issues.  The issue of democratic deficit has to be addressed.

UPDATE: 30 NOVEMBER:

The EU's euro commissioner Olli Rehn has just warned that leaders must take a leap of faith with cross-border integration at next week's summit - or see the bloc break up.

We have arrived at a point in time where serious choices and commitments have to be made.

Economic and monetary union will either have to be completed through much deeper integration or we will have to accept a gradual disintegration of over half a century of European integration.

The problem will be attempting to get a compromise on treaty changes among all 27 states, something which many believe is highly unlikely. One solution could be a series of "inter-governmental agreements" that link small collections of countries.

See also: http://www.bbc.co.uk/news/business-15958461

On the central banks bazooka:

http://blogs.telegraph.co.uk/news/benedictbrogan/100120865/coordinated-global-bank-intervention-in-the-euro-crisis-is-a-defining-moment/
http://www.bbc.co.uk/news/business-15966753
http://www.bbc.co.uk/news/business-15965639

See also: http://www.telegraph.co.uk/finance/financialcrisis/8926403/More-QE-is-not-the-antidote-to-the-eurozone-crisis.html