Germany - Despite its stellar status, Germany is far from all-conquering. The Dax share index has lost 29% since the beginning of July – significantly worse than London's FTSE 100 – while business confidence is tumbling at the fastest rate since the collapse of Lehman Brothers. New data showed a sharper than expected fall in industrial orders in July, especially from beyond the eurozone. German taxpayers are becoming increasingly sceptical about efforts to help eurozone strugglers such as Greece. That in turn has put domestic pressure on the chancellor, Angela Merkel, whose coalition government has suffered a string of setbacks this year.Italy - Against a backdrop of nationwide strikes, the government of embattled prime minister Silvio Berlusconi is scrambling to secure parliamentary backing for a revised reform package, new tax rises and spending cuts. The 20% VAT bracket will be raised to 21% and a special 3% levy will be imposed on incomes of more than €500,000 (£439,000). Berlusconi said ministers would approve a new "golden rule" in the constitution on balanced budgets and simplify local government.A strike in Rome on Tuesday showed the strength of feeling that richer Italians had escaped tax rises and spending cuts. Analysts believe Italy could be the next Greece. Economist David Mackie at JP Morgan said: "Once you say to Italy, we will not allow you to fail, they then have the upper hand. There has been a moral hazard issue with Greece for some time. Now we have one in Italy, too."
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Switzerland
The economy has appeared largely immune from the effects of the current crisis and grew robustly in the second quarter. GDP climbed by 2.3% from 2010 but the latest quarterly increase – 0.4% – was the lowest since 2009, causing economists to worry that the strength of the Swiss franc would put a further brake on expansion this year and into 2012. That is why the Swiss National Bank in effect devalued its currency on Tuesday. The Swiss franc, seen as a safe heaven, had moved close to parity with the euro but its strength has made the country's exports much more expensive and harmed its tourism industry. Swiss residents have been crossing into Germany to shop.
Even so, economists warned that the powers of central bankers can be very shortlived when it comes to currencies
Europe has never existed
Germany's constitutional court has rejected lawsuits which were brought with the aim of blocking the country's particpation in the eurozone bailouts.
The headlines are just coming through now, but Reuters reports the vote was "very tight." The court also said Germany's parliament must approve any aid before it is granted.
The positive vote provides some relief for Chancellor Angela Merkel. We will give you more reaction as it comes in.
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