The outlines of yet another Eurozone fiscal policy were disclosed to the media over the weekend. We think it is clear that Germany is using the current crisis environment to force budget deficit targets on Eurozone members. Unlike the 3% GDP targets agreed to at the founding of the Eurozone, these new targets are expected to be enforceable (somehow) by a centralized European authority.

David Fuller's view Now the ECB needs to step up, as I have been mentioning recently, including in this comment last Friday:

The ECB will either be remembered for its splendid Austrian orthodoxy in upholding a narrow mandate while presiding over the demise of the currency union for which it was created, or for doing what central banks are supposed to do in being the lender of last resort.

I also maintain that European markets are undervalued, although investors need to see a realistic prospect of stability following the current crisis, for more than a short covering rally to occur.