European leaders are having yet another summit this week to talk about their banking-and-sovereign debt crisis, which has been unfolding over the last few years.
The hope is that they'll finally arrive at an over-arching solution that will finally solve the problem once and for all.
But they won't, says Mark Dow, a hedge fund manager at Pharo Management.
They'll probably get closer to a solution for the problems with one Euro country, Greece, but this won't stop the crisis from then progressing to other countries like Portugal, Spain, and Italy.
The Greece solution will likely end up being a "haircut" on the debt Greece owes, as well as a cash injection into the banks that own the debt. The leaders will also try to increase the size of the European bank-bailout rescue fund to try to neutralize concerns that other countries will get into trouble.
But solving the crisis once and for all by haircutting the debt of all countries that the markets are concerned about would be unacceptable, Dow says. The European leaders have too much ego and political capital at stake to make moves like that until they absolutely have to.
Ultimately, Dow says, the Euro area will probably break apart. The cultural and economic differences among the countries are likely too extreme to permit the further fiscal integration required to make the single currency a long-term success. And in times of crisis, Dow adds, countries tend to become more isolationist, not less.
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