By: Mike Campbell

If the Euro was a patient, there’d be a team of doctors dancing around its body with defibrillators in hand, earnestly trying to get a stable pulse out of its heart. In medical terms, the Euro is defibrillating; the heart is beating, but there is little useful output. The surgeons are not acting as a team and views on how best to treat the patient vary from lengthy bed rest through amputation of an infected extremity (Greece) to ripping the heart of the patient and trying an experimental organ.

Oddly enough, the patient (the Euro) has been doing better recently whilst those charged with its care prevaricate. The damage from the last chapter of sovereign debt jitters dropped the Euro from the 1.45 level against the US Dollar in late August, to 1.318 at the depths of the crisis earlier this month. Whilst the experts have dithered, the Euro has recovered to stand at 1.3828 as of yesterday. In the normal way of these things, the recovery has not been linear, but the trend is clear to see and looks set to push higher.

If the Euro is “doing quite well” despite the best efforts of its care team, the same can’t be said of the markets. Stocks surge when it is suggested that the finance ministers and leaders of the Eurozone will be announcing the deal in a few days, only to fall back when a politician explains that accord has yet to be found. So it was just yesterday when Nikolas Sarkozy emerged from a meeting with Angela Merkel, Jean-Claude Trichet and Christine Lagarde in Germany. The French leader told the press that France and Germany were still at odds over the rescue plan for European finance and the Euro and, hey presto, the markets have fallen.

A consensus opinion will emerge over the way forward for the management of the sovereign debt crisis and the issue of banking liquidity; the only question is when.