With the euro-zone debt crisis ending the year much deeper and broader than it started it, it seems unlikely that the next 12 months will see a repeat of the (just about) “muddling through” process seen in 2011. Rather, 2012 looks like being the crunch year for the euro-zone. Either the policymakers will step up their efforts and finally produce the much-promised policy “bazooka”, or the crisis will come to a head and the euro-zone will cease to exist in its current form. For now at least, we think that the latter is more likely than the former.

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