The eurozone is not out of the wood....

Anyone who believed fondly that the eurozone's political leaders had sorted out the short-term problems of the euro will have been disabused by the events of today. It was expected that the recent eurozone conference would merely paper over the cracks whilst a lasting solution involving fiscal and political union was worked out.  However,  that the cracks would reappear so quickly must be disconcerting to the optimists, but not to seasoned cynics.

I concur fully with the content and tone of this article:

http://www.telegraph.co.uk/comment/telegraph-view/8856420/Europes-sticking-plaster-will-not-heal-the-wounds.html

Italy is coming under presssure as its debt costs soar to unsustainable levels:

http://www.telegraph.co.uk/finance/financialcrisis/8856661/Italian-debt-soars-on-EU-bail-out-fears.html
http://www.bbc.co.uk/news/business-15490890

Portugal and Spain are suffering a contraction in money supply which will threaten their ability to repay debt as economies slide:

http://www.telegraph.co.uk/finance/financialcrisis/8854267/Europes-rescue-euphoria-threatened-as-Portugal-enters-Grecian-vortex.html

The German government is running into probles wit hthe German Constitutional Court:

http://www.spiegel.de/international/germany/0,1518,794578,00.html

There is the problem of the monitoring arrangements in the eurozone agreement will upset Greece and Italy:

http://www.telegraph.co.uk/finance/financialcrisis/8853908/EU-rescue-rescue-document-is-one-giant-leap-for-the-eurozone.html

the German central bank is worried that the EFSF leverage is a re-run of the mistakes that have led to the current problems - don't give an alocoholic more drink:

http://www.telegraph.co.uk/news/worldnews/europe/eu/8854382/Eurozone-bail-out-holes-emerge-in-the-grand-solution-to-solve-EU-debt-crisis.html

Finally where is the UK in all this?  The Chancellor of the Exchequer has said that the UK will not contribute to any IMF support of leverage on the grounds  that the IMF supports nations and not currencies:
http://www.telegraph.co.uk/news/politics/georgeosborne/8854331/George-Osborne-to-block-IMF-cash-for-eurozone-bail-out.html

However, there is a deeper worry that the EU is moving to a two tier system which will damage the interests of countries outside the eurozone:

http://www.telegraph.co.uk/news/politics/david-cameron/8853084/Europe-the-plates-are-shifting-and-David-Cameron-risks-being-stranded.html
http://www.telegraph.co.uk/finance/financialcrisis/8850724/David-Cameron-fails-to-win-assurances-on-eurobloc.html

Finally, the eurozone has gone to China with a begging bowl for help.  One interesting comment on this is that China is committed already in southern Europe and the risk is that these states will become client states of China and this will result in a surrogate Chinese presence within the eurozone and the EU.

http://blogs.telegraph.co.uk/finance/jeremywarner/100012880/europe-kowtows-to-the-chinese-dragon/
http://www.bbc.co.uk/news/world-europe-15489202
http://www.spiegel.de/international/europe/0,1518,794575,00.html
http://www.telegraph.co.uk/finance/financialcrisis/8857165/Eurozone-rescue-fund-tries-to-tempt-China-with-bonds-issued-in-yuan.html

The two things which would resolve the issues are the very ones the Germans will not permit: let the European Central Bank act as lender of last resort and engage in quantitative easing.

The next few weeks are going to be hairy.  It comes as no surprise therefore to learn that Cameron has instructed Whitehall to look at the potential for repatriating powers to the UK.

http://www.telegraph.co.uk/news/worldnews/europe/eu/8856974/Whitehall-officials-urgently-review-Britains-EU-membership.html