Euro zone bailout: The euro zone has gone for the big numbers &mdash; and it works, at least for now. European Union leaders and their finance ministers have come up with a 720 billion plan to stop contagion in sovereign debt. The European Central Bank has agreed to play ball, and will add sovereign bond-buying to its crisis-fighting tool box. The central bank is also spraying liquidity at the banks to stop the sovereign crisis turning into a new banking one.

Massive attack

Business Standard

ECB stress tests: The European Central Bank is becoming increasingly vocal in its opposition to a Greek debt restructuring. That has led many to believe that its own balance sheet would suffer a body blow in such an eventuality. But a Breakingviews analysis suggests that is not so.

Not lethal, but serious

Portugal: Moody&rsquo;s hasn&rsquo;t made any new friends in the euro zone by downgrading Portugal&rsquo;s debt by four notches to junk status. The rating agency&rsquo;s decision may look harsh and even unfair, since the Portuguese government is only a few weeks into implementing the austerity programme it agreed on in exchange for its euro 78 billion bailout by the euro zone and International Monetary Fund. But, Portugal doesn&rsquo;t have the luxury to ponder what&rsquo;s &ldquo;fair&rdquo; or not. It should listen to what its creditors are saying and act accordingly.

Beware of the risk

Euro zone governments want to save their currency. In 2012, citizens must decide whether they agree. Forget for a moment about the ECB&rsquo;s bazooka or other instruments of mass disruption. Ignore Italy&rsquo;s 7 per cent bond yields, and debt topping 125 per cent of gross domestic product. After a series of national crises or rebellions, and government changes across the European landscape, the euro zone is nearing the crucial moment when its citizens from Lisbon to Leipzig must choose whether they&rsquo;re ready to do what it takes to keep the single currency alive.

Time to choose

France is heading for a major political and financial crisis in the spring that could dwarf the big Italian euro scare of 2011. Next May&rsquo;s quasi-simultaneous elections of a new president and parliament may well spark the conflagration.

Pernicious climate

France&rsquo;s two main political parties have greeted the long-expected Standard &amp; Poor&rsquo;s ratings downgrade in a depressingly familiar way. The socialist presidential candidate Francois Hollande said that it was Nicolas Sarkozy&rsquo;s policies, not France, which was downgraded. In return, the French prime minister Francois Fillon suggested Hollande submit his electoral platform to S&amp;P for evaluation. Bickering and escapism are the order of the day, and France is on track to waste what could have been a good ratings crisis.

Missing a step

French bankers, traders and hedge fund managers should resist the urge to book a one-way flight out of Paris if Francois Hollande becomes president in May. The French socialist leader has identified the &ldquo;world of finance&rdquo; as his main adversary &ndash; simultaneously discarding outgoing president Nicolas Sarkozy and stealing a theme from his upcoming campaign. Tapping into anti-bank sentiment is a popular political strategy. But, the wrath of blind punitive socialist justice isn&rsquo;t about to descend on French finance. In fact, the serious reforms Hollande proposed aren&rsquo;t particularly scary, and the scary ones he hinted at aren&rsquo;t serious.

Pierre Briancon