Euro crisis entering ‘make or break’ territory

The euro crisis has moved into a new and arguably much more dangerous phase over the past couple of weeks.

It was one thing dealing with the small peripheral economies such as Greece, Portugal and Ireland, but it is an entirely different matter when the larger economies such as Spain and Italy start to get dragged in, in a serious way. That is exactly what has happened over the past week.

Last weekend the eurogroup agreed to provide the Spanish government with €100bn in order to recapitalise its ailing banking system. The financial assistance will be provided by the EFSF (European Financial Stability Facility)/ESM (European Stability Mechanism).