Wolfgang Münchau: Why the latest EU-Agreement will not solve the debt crisis

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In his FT column, Wolfgang Münchau says this was a politically smart agreement, but it won’t solve the debt crisis. The EU still cannot decide whether it wants to bail out or allow member states to default. By ducking the question, the situation will not improve, and will ultimately culminate in a potentially messy default. It would be better to resolve the crisis either through a programme of debt restructuring, bank restructuring, ECB recapitalisation now, or a bailout by replacing national debt with a common European bond. By muddling through, the EU is stuck in a purgatory between bailout and default, as the crisis continues.