Euro puff pieces - but can it work?

Label me a sceptic on this one. An article in Bloomberg predicts "victory" for Germany as they force the rest of Europe into German-style austerity and brings Europe back to prosperity by ending profligerate spending by governments.

Look, it is a nice dream, sure, but we should remember that we are hoovering a few inches away from pan-European insolvency. Theoretically, if all things go the right way, Europe might pull through and only have to restructure Greece and probably Ireland. But facts are facts, and the facts say that we have an upcoming tightening of monetary policy that will lead to a rather serious economic bust.

Did the European banks become extra-ordinary solvent while no one was looking? I am sure they don't mind people forgetting about them while they slowly recapitalize, but the European debt Ponzi still exists, mind you.

I think commentators are getting ahead of themselves with this inflationary growth period. Even if things look a tad better now than last year, the real test comes when ECB starts hiking interest rates. And I don't think it will be very pretty.