Euro crisis requires market solution

Ultimately the euro crisis remains a pressure cooker building up steam despite the protestations of the currency system being saved by multiple political interventions. Yet after a half dozen supranational attempts to instil order within the sovereign nations of the EU, the markets are clearly not listening. Instead a market solution is now needed.

Many commentators have been suggesting a eurobond as the answer to Europe’s problems. However, given that Germany has so far rejected this option, the alternative needs to be a simple programme that rewards prudent debt levels, while providing a space for errant sovereign states to reorganise their finances.

Euro rate rise less likely after inflation and job data

Eurozone interest rates are likely to stay on hold following the release of official inflation data from Eurostat.

Inflation in the 17 countries that use the euro was 2.5% year on year in August, unchanged from July's figure.

While it is still above the European Central Bank's target of just under 2%, it means that prices are rising more slowly than earlier in the year.

Portugal plans biggest spending cuts for 50 years

The Portuguese government is planning the country's biggest spending cuts in 50 years, a move its finance minister described as "unprecedented".

Vitor Gaspar said the centre-right Social Democratic administration would reduce public spending from the current 44.2% of Portugal's annual economic output or GDP to 43.5% by 2015.