The expectation in both Brussels and Whitehall is that this weekend will see a bailout for Spain agreed. It appears that a compromise which would not impose harsh external conditions, which is why Madrid has been rejecting offers of help to date, but would satisfy German concerns about bailouts simply encouraging reckless behaviour, is close to being reached.
But this does not mean that the Eurozone governments will be doing anything to get properly ahead of the crisis. Instead, they have decided to wait until after the results of the Greek elections before deciding what to do next.
The increasingly agitated statements coming out of Washington reflect a growing concern among the other advanced economies that the Eurozone will just carry on muddling through with the crisis never quite coming to a head. If this happens, global confidence will not return — because there’ll always be worries that the Eurozone shoe is about to drop — and we’ll be in for years of slow growth at best.