Eurozone finance ministers have managed to agree that the European Financial Stability Fund (EFSF)  will be able to guarantee up to 30% of new bond issues from the eurozone’s struggling nations.

The agreement is a positive, but positive isn’t really enough at this crucial stage. The market remains sceptical; the issues that remain unaddressed are many and varied. Investors are looking for that ‘bazooka’ measure which is really going to get to the heart of the debt crisis.

It is what has not emerged from the meetings thus far that is worrying the market; there is no detail as to how much the EFSF will be leveraged and how the IMF will be involved.

With Italian bond yields recently verging on 8%, the European Central Bank’s current approach to bond-buying is clearly insufficient and needs to be addressed.

A eurozone recession is now almost inevitable, and one question which still remains untouched is how EU leaders intend to get growth back on track in the region.

Eventually, we really need to be seeing greater fiscal integration through a common eurozone bond; this is the only silver bullet solution we can identify. Closer fiscal union is the key objective of the 9^th December EU summit, so investors will be hoping on some genuine progress there. Next week brings the monthly European Central Bank interest rate decision, and further action in the form of another eurozone interest rate cut would be a welcome move.

Yesterday’s coordinated liquidity measures from six major central banks is another very welcome step and has given risk appetite and investor confidence a real boost. Many European banks are really feeling the squeeze as a result of the effects of the region’s debt crisis, and yesterday’s announcement will have take the pressure off to a significant degree. However, the liquidity measures address a symptom of the debt crisis, and goes nowhere near to the crux of the issue, so the rally in risk is likely to be reversed before long. There is simply too much uncertainty ahead, which should favour safer currencies such as sterling and particularly the US dollar moving forward.