Draghi is proving a great political maneuverer: “This is what we all agree is needed to save the euro, now, Germans, stop us if you dare”.

You have to look very hard to find any positive developments on either side of the Atlantic. How strange that the USA’s currency and sovereign bonds have become havens for investors despite the chronic problems of the world’s largest economy in terms of internal and external deficits, political stagnation as well as chronically underfunded future pension and health care costs. The reason, of course, is that confidence in the euro and in the survival of the euro zone is so low that even the dismal outlook of the US economy looks good by comparison.

'Worry is the interest paid by those who borrow trouble’

What looks good can have unintended consequences, witness LTRO the low interest rates of the ECB and the entire “Target2” intra EMU settlement system

So the vision of a fiscal union is being slowly backed into via a nascent banking union, thereby lightening the mood in financial markets. How durably?

The EC has come up with a vision for future Europe. Now it will be seen if first the politicians then the voters sing up to it.

Bailing out banks is a necessity, but let us examine the real purpose (the depositors, the “system”, as well as the conditions and the price paid by creditors and shareholders.

If a federal system for the euro zone comes about, it is worth considering Merkel’s seven “neins” to see which will yield in what order, precipitated by Spain’s banks.

The threat of Greece “walking away” from the euro should add some realism to Hollande/Merkel talks and give a push towards Germany taking its responsibility.

How interesting to see if, how and when Merkel and Schäuble react to a widespread rebellion against an excess of austerity and a desire for a serious growth programme.

The French must now choose between the Hopeless and the Horrible. If it is the former, say goodbye to European cohesion and competitiveness. Maybe the Horrible is the lesser evil!

The debt crisis cannot be solved by pretending it is not there. Yet the leaders in at least two major countries have their heads in the sand.

Is the SNB’s policy stance sustainable in the medium term?

We try to define the real problems on both sides of the Atlantic to see if political leaders are actually addressing them. It is not encouraging.

The recovery is weak but enough to cause a rise in the yields of those government bonds considered safe-haven. Consider the impact on corporate bond yields.

When risk is “on”, serious analysis is “off”, allowing many unknown companies, from all over the world, to tap the corporate bond market

We see this as a major reassertion of sovereignty and democracy. It will not be the last “rebellion”.

To explain the lack of bid liquidity in European corporate bond markets, we hypothesis the existence of a yield barrier below which buyers refuse to go.

An unusual mixture of rising markets in both equities and corporate bonds allows cleaning up of fixed-interest portfolios ready for a long period of little economic expansion.

A benign atmosphere has set in, we hope for a few months. What a pity the underlying barriers to sustainable growth remain in place, thanks mainly to political inaction.

Europe seems to have joined the USA in showing a few silver linings in the dark economic clouds. The ECB’s massive bank lending may be thanked. For increased liquidity.

Rejoice in the improved employment situation in the USA, but do not confuse breathing space provided by cheap money with a real solution to economic weakness based on rebalancing.

What is in Merkel’s mind as principal decider for the euro crisis? She is too smart for her ludicrous description of political union to be anything but a political ploy.

“Federalisation or bust!” should be the slogan of the euro politicians and bankers now meeting.The ghost of Alexander Hamilton must be wryly smiling. Is Sarko a latter-day Hamilton?

At the moment, bond market yields are being driven not by economic fundamentals, but by mass psychology and political issues. How long can this continue?

With the departure of two Prime Ministers, some breathing space has been given to the euro zone to find permanent solutions, and to fixed-income investors to adjust their banking portfolios.

As panic gives way to reflection on Papandreou’s referendum call, there may be good results from this after all, such as a more decisive rescue and federalisation with democratic underpinning.

There may be lessons from the Swiss national Banks’ negative repo rate and the failure of Dexia. Both reflect aspects of how the euro crisis has become a banking crisis.

The main features of the euro rescue plan are now appearing and there is hope that they will crystallise at the G20 meetings, including an outline of the “federal” structure.