Europe is holding up the recovery

It’s the time of year when financial journalists begin to receive dozens of press releases from companies from across the financial services spectrum.

You’ll certainly see them: predictions for the FTSE 100, where gold price is going to go, whether property is going to be a safe haven in 2012.

But the one caveat in every prediction for 2012 is Europe.

Clearly, the European sovereign debt crisis must be resolved for the global economy to get back on track.

Indeed, if no solution is found then the chancellor’s recent Autumn Statement will count for little. As a European Union member not in the eurozone, Britain’s contribution to the process of solving the problems with eurozone sovereign balance sheets will be minimal.

All eyes are currently on German chancellor Angela Merkel and, to a lesser extent, French leader Nicolas Sarkozy. (blog continues below)

This week’s European summit will be pivotal in planning a route out of the sovereign debt crisis. It’s needed: Standard & Poor’s has already put a number of eurozone economies on a CreditWatch negative outlook.

But from an outsider perspective, it seems as if the eurozone leaders are dragging their feet.

Obviously, it’s not something that could or should be rushed, but current noises seem to be having little effect in stabilising markets and calming already-frayed nerves.

The predictions may be coming in thick and fast but without clearer signals from Europe, the recovery is still far away.