Policymakers fail to get ahead

The plans agreed at last week’s EU summit look like another example of policymakers sprinting to catch up with events, but failing to get decisively ahead. We are not suggesting that the positive market response will unravel in a matter of days, as it did after the July plan. But as continued economic weakness maintains doubts over the solvency of both Greece and other countries, we suspect that the crisis will rumble on and the policymakers will once again fall behind. At some point, there will be too much ground to make up.