Muddling Through: The 'Realpolitik'of the Eurozone Crisis
by Andrew Bosomworth
The long-term cost of Europe's economic recovery is likely to challenge social tolerance and political will to achieve a fully integrated fiscal and political union.
Although able to exploit the untapped potential of European treaties, the soon-to-be-elected 8th European Parliament looks more likely to continue to muddle through.
We see low medium-term risk for government and corporate bonds with maturities of up to three years, but caution may be required for securities with longer maturities and lower down in the capital structure.