"Eurozone crisis is back and here to stay".

Larry Elliot in the Guardian: “After a four-month respite in which equity markets rallied strongly and interest rates on bonds fell, the eurozone’s debt crisis is on again. Those who said the European Central Bank was merely putting a large piece of sticking plaster on monetary union’s open wound with its cheap credit policy have been proved right. Since the troubled period began at the end of 2009, there has been a clear pattern to events: crisis, response, respite, new crisis. The latest recovery has been robust, but it was always a fantasy to believe that the ECB could solve all the euro‘s problems with its long-term refinancing operations, ladling out ultra-cheap three-year money to European banks. ….The likelihood, however, is that the crisis will go on for much longer. That’s because the problems that have resurfaced over the past week have a deeper, structural cause: the flaw in the single currency that has left the weaker countries of the southern fringe deeply uncompetitive in relation to the powerful nations at the core. The traditional remedy – devaluation – is ruled out by membership of the euro, so the affected countries have no choice but to go for “internal devaluations”, which means making themselves more competitive by driving down wages, pensions and public spending.”