The large gesture that so many had expected to come out of Thursday's eurozone summit in Brussels did not occur. The idea of decisively defending the eurozone against attacks by speculators by issuing so-called Eurobonds with the same interest rate for strong as well as weak states remains a dream. A massive increase of Europe's common bailout fund will also have to wait. The rhetorical call of "one for all, all for one" has not been translated into political reality.

A growing number of voices, not just in Germany, are calling for a red line to be drawn. How does the eurozone's debt crisis end? Will Ireland and Portugal also need a second bailout soon? What about Italy and Spain, who are also dangerously indebted? Above all, where is the incentive for frugal budgets when you can simply be bailed out every time?

Otmar Issing, previously the chief economist at the European Central Bank, believes that Greece will have to leave the currency union if its debt is restructured. That conclusion may be exaggerated, but the reservations at least sound plausible enough.

The demands and expectations of the past two days move between these extremes. As Chancellor Angela Merkel said, there is no silver bullet. The participation of private banks and financial institutions is indeed a new development. The goal is to limit Greece's temporary credit default to just a few days and secure it with Europe's bailout fund, the European Financial and Stability Mechanism (EFSF).

"Marshall Plan"

Greece should be made more competitive with a "Marshall Plan." It is not just the Greeks who will be lent a helping hand, but also the other countries that have been bailed out. Portugal and Ireland will also receive more advantageous loan conditions so that they do not suffocate. Compared to the current situation, that's quite a lot.

But is that enough? If the markets do not react positively, then it has all been in vain. Up until now, the eurozone governments have always lagged behind the markets. After every eurozone summit, European leaders say there will finally be economic peace. Then a few short months later the next emergency meeting is called to send a "clear signal" to the markets.

Despite all that, I prefer the more careful approach. The dramatic step that many are demanding would also have dramatic consequences if it goes wrong. And interestingly enough, those who are calling for the dramatic solution are the ones who won't have to bear the brunt of the consequences. Three emergency summits and subsequent readjustments are preferable to a dramatic step forward - just as Europe stands on the cliff's edge.

Author: Christoph Hasselbach / sk
Editor: Ben Knight