From The Guardian UK: http://www.guardian.co.uk/business/economics-blog/2011/dec/04/global-economy-eurozone-debt-crisis
A eurozone that somehow stays afloat but can't be reformed, banks awash with cash that don't lend, and incoherent economic policy. We've only found a sticking-plaster solution to our crisis
Posted by: Larry Elliott Economics editor
Sunday 4 December
The longer the economic crisis goes on, the less credible sticking plaster solutions become. Four years in, Europe is heading into a nasty recession, China is flirting with a hard landing, the governor of the Bank of England is warning of a systemic banking crisis and George Osborne has announced spending cuts that will continue for the next six years. The United States is the one part of the world where the news has been better recently, with signs of life returning to the housing market and a welcome fall in unemployment.
What's happening in America – where the Federal Reserve has used two rounds of quantitative easing (QE) to boost the money supply and announced its intention to keep interest rates low – has encouraged the belief that recovery will eventually come, provided the policy response is big enough for long enough.
It remains to be seen whether this is indeed the case, since there have been false dawns galore since the financial system froze in 2007. The real strength of the US economy will be revealed early next year, when tax breaks supporting consumption and investment are removed and when the world's biggest economy starts to feel the impact of the slowdown on this side of the Atlantic.
An alternative way of looking at the crisis goes like this. We now inhabit a world of the living dead: a eurozone that will not collapse but cannot be reformed; banks that are kept alive by gigantic quantities of electronically generated cash but do not lend; homeowners who are sitting in homes worth more than they paid for them but are able to stay put because interest rates are so low and lenders have no desire to crystallise losses, and policy that is neither one thing nor the other.