Euphoria may fade under debt deal scrutiny

EUROPEAN leaders may struggle to maintain the euphoria that drove the euro to its biggest one-day gain in more than a year as scrutiny deepens on their latest attempt to stem the region’s turmoil.

The weaknesses of Europe’s common currency area, ranging from its design to a persisting dearth of bank funding and anaemic economic growth, were not properly addressed in the measures revealed on Thursday to stem investor panic, said Harvard University economist Kenneth Rogoff and Jonathan Loynes at Capital Economics.

“My read of this is that the markets are cheered that they’re still alive,” Rogoff — a former IMF chief economist — said as a compensated speaker at the Bloomberg FX11 Summit in New York on Thursday.