Europe: The eurozone is hamstrung by an appalling absence of leadership

Now over-leveraged sovereigns are the biggest default risk. Banks that have raised capital and shed some bad assets might even be OK, unless their sovereign exposures drag them down. It is the big corporates that raised equity in 2009, cut costs and retained cash that look strongest of all. While corporates have submitted to the discipline of just-in-time production and delivery over the past two decades, Europe’s political leaders have become renowned for their always-behind-the-curve response to the sovereign debt crisis unfolding since spring 2010.