ECB’s silver bullet turns out to be a blank

At their summit last week, euro-zone leaders agreed on the basics of a new “fiscal compact” which should help to reduce the risks that another debt crisis such as that seen over the last two years is ever allowed to develop. What the summit did not produce, however, was the action that the markets and many commentators had pinned their hopes on as the main solution to the current crisis – namely, much bigger bond purchases by the European Central Bank.