The strongest support for a bullish view of growth comes from US prospects. However, caution is warranted even here. Bearishness seems appropriate elsewhere...

"Bankers are not going to repeat the errors of the past or buy 10-year bonds with three-year funding. Such a duration mismatch would ultimately be suicide"

Europe’s leaders aren’t giving the currency what it needs: reform, fiscal discipline and international support.

Unless crucial links in the chain of contagion are broken and sufficient resources are provided to cover all sovereign liabilities, the eurozone is doomed.

The contagion of a euro debt crisis will not be restricted to Europe’s weaker states.

GDP growth must be sufficient to outweigh possible deleterious effects of sovereign budget cuts and measures to increase revenues. It’s an impossible ask for Japan and an extremely tough one for the eurozone.

In both the US and the eurozone there is a failure to recognize that the crisis is about solvency not liquidity.

A lengthy, post-stimulus grind of deleveraging is the most likely model for the world economy in the immediate future. This heralds some years of balance-sheet restructuring.

There are doubts that the peripheral countries have the will to cut and tax their way to stability. That leaves growth as the way to balance the books. Where will it come from?

Portugal’s debt crisis is as severe as Greece’s but can be resolved, painfully. The big upcoming sovereign debt risk is not from the eurozone but from the US and Japan.

Continuing political instability in North Africa and the Middle East, together with oil-supply constraints, will increase energy risks and therefore prices.

Higher global inflation and lower growth – stagflation – is on the way. Deflation is much further down the road.

Conditions for expanding the EU’s EFSF are set to be agreed by the end of the month. Even if only some of the Franco-German proposals are implemented, the euro will be greatly strengthened.

Germany’s fragmenting political scene tends towards stasis on big decisions, with key voting groups settling for conservatism. It bodes ill for the country’s role in solving EU problems.

If market confidence in the eurozone is to be restored, not just Greece and Ireland but also Portugal and Spain need the attention of the EU’s Financial Stability Facility.

The Irish government has been forced to take drastic steps that will cause short-term suffering. But its approach is one that other countries might later regret not having adopted.

The EU’s plans to tighten measures to prevent eurozone instability and discipline transgressors are admirable in theory. But implementation will be a tough task and is not in any case achievable until 2013.

Renewed quantitative easing is not a sound answer to the threat of double-dip recession or deflation. A credit bubble cannot be cured by pumping in more credit.

Market satisfaction with renewed US quantitative easing moves is as misguided as the Fed strategy itself. QE2’s perversions herald great pain farther down the road.

Tough times lie ahead for the financially challenged parts of the eurozone. But the rapid rebound in other eurozone countries will sustain Europe’s Economic and Monetary Union, as will Germany’s determination to export fiscal rectitude.

Markets have focused on the woes of the peripheral eurozone member states and their sovereign debt crisis but we should remember that public finances in the UK, the US and Japan are in an equally bad, if not worse, state.

The EU’s single-currency system is under great stress but will not reach breaking point so long as Germany wants it to survive.

Burgeoning sovereign debt is a threat to economic recovery, not a way to achieve it. It will crowd out borrowing for more productive purposes and will inevitably foster inflation and possibly defaults.

Piling on public-sector leverage in an attempt to cure a recession that was itself caused by excessive private-sector leverage makes no sense. It might even create stagnation.

There is no easy way out of the overleveraged situation many governments have got into. A sovereign debt crisis looms, and not just for the most profligate.

Greece has a tough road ahead of it to restore economic health and credibility. But those who believe it will default, leave the eurozone or abandon the EU are living in a fantasy world.

Germany’s fiscal discipline imperative, which perforce will be imposed on the whole eurozone, is the key to a more dynamic, less state-heavy EU economy.

The financial markets rally cannot be maintained because there is no way we can go back to the bubble economy of the past that was gorged by excess leverage. Far from being unwound, this has been sustained by governments.

The financial markets bounce is unsustainable. Demand will fall and corporate costs will rise as artificial stimulus is withdrawn and fiscal retrenchment kicks in. Expect an almighty splat as the markets drop.

Gordon Brown’s government has no clear strategy for dealing with the budget deficit. Nor does its likely successor, the Conservatives led by David Cameron.