PARIS (Reuters) – Europe has cleared more obstacles on the road to containing its sovereign debt crisis and stabilising the euro zone after Germany’s constitutional court allowed a permanent bailout fund to go ahead and the Dutch voted for pro-European parties.
Coupled with a European Central Bank decision to buy short-term bonds of states that apply for assistance and abide by strict conditions, and with EU proposals for a single euro zone banking supervisor, Wednesday’s ruling clears the way for a concerted effort to draw a line under the crisis.
However, there are still risks on the way to repairing the flawed euro construct, and Europe has yet to find a strategy to revive economic growth that would enable highly indebted states to reduce debt burdens and put the jobless back to work.
Among the bailed-out euro zone countries, Ireland is inching its way back towards the capital markets and Portugal is doggedly implementing a tough austerity programme, and has just been granted an extra year to achieve its fiscal targets.
Greece, where the crisis began, remains an exception to the general mood of cautious optimism, but talk of forcing Athens out of the euro zone has abated for now.