Accord in Brussels will not be enough to stave off crisis

EUROPE’S leaders are meeting under a cloud today as they attempt to thrash out a solution to the Eurozone’s debt crisis in the wake of a lacklustre Spanish bond auction and ongoing disputes between nations.

On the first night of the summit yesterday, European Commission President Jose Manuel Barroso delivered a stark warning to the region’s gathered leaders, saying: “The current sovereign crisis has now become systemic in nature.”

But despite the belief that the crisis requires structural changes in the Eurozone economies, there is little hope that such a wide-ranging deal will be struck today.

Ministers have said that some of the more radical proposals discussed to address the crisis are not on the agenda. Chancellor Angela Merkel has already ruled out issuing region-wide eurobonds or an increase in the size of the €440bn (£373bn) bailout fund.

Instead, leaders will merely tweak existing EU treaties to establish a legal basis for a permanent bailout fund to be operational from 2013 onwards.

Capital Economics’ Ben May said that such a move “will do little, if anything, to ease a number of more general concerns that investors have”.