Wall Street Journal
March 1, 2012
It is possible, though not assured, that the acute phase of the euro zone's financial crisis is passing. At the very least, the soothing balm of cheap three-year money from the European Central Bank flooding into the region's banks has lifted financial-market anxiety.
Some critical uncertainties have been removed or reduced. Investors had been terrified by the lack of clarity over whether the euro zone had a modern functioning central bank, or one that was so hidebound by its rules that it couldn't act even to save itself. The ECB's actions to help banks since December have made clear that it has significant capacity—and the will—to act to stem the crisis.
The long-awaited debt restructuring for Greece is also under way. It won't be voluntary—except, as Commerzbank boss Martin Blessing said, in the Spanish Inquisition sense of the word—and legal challenges are likely. But bondholders understand the framework and have prepared themselves for the losses.
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