Goldman is already trying to tamp down investor expectations for Friday's big Eurozone summit.
As analysts Andrew Benito and Huw Pill, there's still a major area of disagreement between Merkel and Sarkozy on the essence of what Europe is going to look like.
Our bottom line is the following: the ‘clean’ solutions that would have seen clear resolution of that impasse appear to have been ruled out following Monday’s German/French meeting. That makes something altogether fuzzier likely to emerge from Friday, and this risks falling short of market expectations. The sequencing that we believe is being followed will be delayed further into the new year.
And so ultimately...
This brief overview, alongside experience from the October Summit, adds to our sense that what emerges will be another step forward, it will build on past progress but it will also involve some degree of ‘wishful thinking’. The new year will be required to clarify what is meant by ‘fiscal union’. We expect the ECB to move progressively towards more proactive purchases on a larger scale. But any such actions will fall short of attempts to ‘cap spreads’. We do not think the ECB to act more proactively soon, based on the commitments and statements of intent that emerge on Friday.
