banking and capital markets
January 27, 2013
Davos Reflects New Optimism About the Euro
Risk of a breakup of the single currency has faded, but the growth that’s needed to resolve the crisis remains elusive.
By Tom Buerkle
European leaders were as ubiquitous as ever at the World Economic Forum, but they didnt hold center stage for a change. The risk of a breakup of the euro has receded in recent months, yield spreads have tumbled, and corporate executives, bankers and investors were only too happy to get back to business as usual at the Davos, Switzerland networking extravaganza.
For Mario Draghi, the man whose promise to do whatever it takes to save the euro is largely responsible for the new optimism, the recent tranquility in markets was cause for celebration. The European Central Bank president called 2012 the year of the relaunching of the euro, and claimed that the creation of a new European bailout mechanism and efforts by many governments to rein in deficits and enact structural reforms had unleashed a positive contagion in financial markets.....