Is there a clash of interests between short and long-term crisis solutions in the euro area? Swedbank asks in is latest economic outlook.

There is an urgent need to solve the acute crisis in the euro area, and the ongoing EU Summit has pointed to existing instruments that can be used under strict conditions in order to bring down Italian and Spanish borrowing costs, the bank said, adding:

However, without taking a step forward on long-term solutions – building the institutions needed for the currency union, such as a fiscal union and a banking union – the hesitancy from countries left with the check (e.g., Germany) will grow and the risk of the breakup of the euro, and even the European Union, will become non-negligible.