Friday's (25 March) EU summit failed to establish a clear road map for the resolution of the region's sovereign debt crisis, said Jeremy Batstone-Carr, head of private client research at Charles Stanley.
"Despite the pre-summit hoopla, no decisions have been reached. In particular nothing has been done to address the immediacy of the crisis as it affects Greece, Ireland and particularly Portugal, which may need assistance from the European Financial Stability Fund (EFSF) as soon as this week.
"The allegedly permanent solution arrived at in Brussels is a €705bn (£621bn) lending facility - the newly christened European Stability Mechanism - that is to be funded by the region over five years, starting in 2013.
"How such a conclusion can be regarded as a credible solution for Portugal, or indeed Spain, whose banks remain under pressure, remains to be seen."
Mr Batstone-Carr claimed there was no indication that anything debated at the summit could plausibly avert a default on a possibly significant proportion of Europe’s sovereign debt.
"Simply lending money to already hugely over-borrowed nations does not help solve a debt crisis."
Mr Batstone-Carr said any one of Greece, Ireland and Portugal could default at any time.
He warned: "Neither does a plan exist to address the ramifications of default across the banking sector or the financial system more generally.
"In our view the EU summit failed and weak policy initiatives serve only to risk making a bad situation even worse."
Azad Zangana, European economist at Schroders, agreed the summit had failed to achieve its aims.
He said: "It is important for the discussions to continue, but in terms of actual progress and in terms of agreeing to the expansion of the EFSF, that has not been achieved so it is disappointing.
"As things stand there is not much urgency in terms of market pressure to have that €440bn for the EFSF."I think positioning in the market is much better now than it was a year ago so reaction to this news has been less dramatic than in the past."
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