Comparing to debt levels on the Eurostoxx 50 and using historical projections, Afi analysts said a safe benchmark would be a 3 or 2.5 ratio. They warned, though, that capital expenditure–spending in areas where profits can grow–will drop accordingly by at least 5 percent a year to some €32 billion.

In 2006, capital expenditure levels were on the €50 billion line, but that amount of re-investment is out of the question with asset profitability under 1 percent, depressed productivity elsewhere in the Eurozone and expensive credit for many market sectors.

Afi experts said the main trend in stocks in the peripheral economies would be one of ‘balance-sheet reparation’. Companies will press further ahead to increase deleverage, no matter how much risk premiums deflate.

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The first quarter of the current year has left the common currency area reeling, to be sure, but it does so amid a debate about the blessings of austerity as the main pro-recovery policy from Brussels and the way it is being implemented in some peripheral economies. The scenery is a changing one, rather than purely volatile or pessimistic. Berlin and Brussels are learning the hard way that there are sectors of the southern European economies in need of a financial cushion, which in turn would make easier to act tougher against waste and inefficiency, particularly in public budgets.

The Barings Asset Management survey to find out about the agenda of financial intermediaries in the City sends the European Commission a message worth reflecting on. Up to 71 percent of professionals worry that the Eurozone seems unable to return to growth, “one of the biggest macro-economic challenges to investment over the next six months.” 60 percent are concerned about the capacity of over-leveraged economies to cut government debt, five percentage points more than in December, 2012

“Considering the recent turmoil in the Eurozone, it is unsurprising that intermediaries are concerned about overall global economic health,” Rod Aldridge of Barings explains, ”Leaving aside Cyprus, the macroeconomic picture does remain tough, albeit marginally less tough than it was in the Autumn.”

Wealth management advisor Towry said today its British clients fear what may happen to the Eurozone. Andrew Wilson, head of investment, thinks that “with France entering its second recession in four years, along with the recent troubles for the likes of Cyprus and Italy, the date that an electorate chooses to leave the Eurozone is being brought ever closer, for better or for worse… There remains much political will behind keeping the Eurozone together, but there will be much more pain to come with other countries requiring write-downs on its debt.”

The trouble is that it isn’t the first time this is said, and it will not be the last, either. The Eurozone must live up to what Europeans expect from it: a rational plan to create jobs, strengthen welfare services and free the private initiative from bureaucratic burdens.

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For instance, the banks. According to the regulator, the Prudential Regulation Authority, the UK’s financial system suffers a capital deficit of up to £25 billion, a gap that must be covered in 2013 to reach the minimum 7 percent core tier 1 capital ratio target. RBS, Lloyds and Barclays would have already begun the hunt of resources with asset sales (St James Place, Scottish Widows Investment, Citizens) and convertible bonds.

Indeed, risk agency Moody’s recent downgrade to junk status of Co-op Bank set a reminder of British banks’ troubles, analysts at Santander said Tuesday in a report. Co-op Bank has a 6.7 percent core capital level, 1 percentage point below the European average, and its late-payment rates have increased by 2.6 percentage points since last year to 10.7 percent in the main portfolio–it is 28 percent in the non-core portfolio. Moody’s also explained that profitability expectations look weak.

Co-op’s capital deficit is relatively small, of some £1 billion, but this limited size means nothing when “there are no recapitalisation alternatives,” Santander experts remarked. The bank has no access to the equity market, but although it has admitted solvency constrictions, it says it could use its insurance business and other assets to deal with them–a sale would bring in up to £800 million.

Whichever the solution is chosen, Co-op has adamantly refused the idea of needing a public cash injection. Even so, this is a story that will help little to improve banks’ image among the British people, not unlike what happens to its EU neighbours. Lloyds research proves the trend: over one quarter of students (28%) surveyed for a recruiting paper said they would be “too embarrassed to tell friends if they are going to work in a bank.” 41% of students responding to the survey distrust banks and financial services providers and 56% trust banks less than they did five years ago. One in every two students questioned (58%) thinks that an organisation’s reputation will influence their career decision.

“We need to take steps as a sector towards rebuilding our reputation through how we behave and what we do,” noted Lloyds CEO António Horta-Osorio, “the next generation should see banking as an industry that helps to build economic wealth and is playing its part as a useful member of our local communities.”

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David Cameron, the current Prime Minister, had kicked down the road the can of the British European Union membership with a vague promise to hold a referendum in 2015–yes, if he is re-elected. But Lawson, and much of the traditionalist wing of the Conservative Party, has given it back to him with the resolute spirit of winning this game. And this time around, it sounds reasonable.

In a way, the Great English Euroscepticism was irrational until the Eurozone began to burst here and there, and the well-meaning rhetoric of the elites in Brussels and Strasbourg fell into a provincialism-stinking pit. “The United States of Europe is not for us,” Lawson argues. In all honesty, Europeans of three quarters of the Old Continent would now agree with that statement. “We need not be members of the single market to export our products to our neighbours,” he explains, and he is correct. “The European Union has become a bureaucratic monstrosity” is another one of those phrases of Lord Lawson that would be very difficult to refute.

However, when it had to materialise as a political party, Lawson & Co.’s Euroscepticism has taken the shape of uncouth, xenophobic populism, whose programme reeks of ignorance about the ethnic diversity of modern society in its own country, ignorance about the global economy, and dishonest politicians who harangue about the futility of the European Parliament while charging expenses for meetings they do not attend (Nigel Farage), or stoke the fire against immigration while hiring Polish workers at low wages to remodel the family’s rural mansion (Roger Knapman).

English Euroscepticism was never too civilized–hatred never is. The UK Independence Party is a good example of it. But there’s nothing special here. The longing for an impossibly violent empire, apprehension of strangers, and that poisonous substance, insecurity, are a combination well known to Europeans of all origins.

UKIP has grown from 17,220 members to 26,097 in the last 12 months and gained more votes than the Liberal-Democratic Party in the recent local elections, ranking only behind Conservatives and Labour. But despair not: the English can easily combat the degradation of their national political life if they shoot with the same intellectual precision most use when discussing economics and finance.

“The GDP news that the UK economy has left the territory of recession and enters a growth phase must have inspired Chancellor George Osborne with a sense of relief,” said economist Azad Zangana in a recent note to investors by Schroders, “especially after the International Monetary Fund admonished him and recommended a partial u-turn of his plans. Yet, from our point of view, the government has been successful when not aggressively pursuing the fulfilment of fiscal deficits and focusing instead on the reform of public services.”

According to the National Institute for Economic and Social Research, NIESR, the UK GDP will rise to 1.5% between 2013 and 2014, and will stabilise over the 2% fringe between 2015 and 2017. That’s when unemployment, now at nearly 8%, will fall slightly. Not bad, relatively, compared to most European colleagues.

Perhaps at the root of these humble numbers there is the successful attempt to escape the suffocating dichotomy in which the Eurozone remains trapped. Stephen D. King, HSBC economist, puts it thus: “Since the crisis erupted five years ago, most of the ministers and their minions theorists have been sitting in the waiting room to watch time go by until it resembles what they knew. Whatever the ideological difference between Keynesians and austerity champions, both groups share the false faith to believe that with time and their respective economic policies, the good times will return. They do not realise that this will never happen.”

Gavin Oldham, director at the Share Centre for investors, brings further evidence that in the UK they are getting rid of those today obsolete concepts. Oldham argues that the mechanism by which we calculate our GDP is practically useless. “GDP fails us as an indicator of economic activity,” he explains, “because only records movements with monetary impact. But right now, our economies are demonetising themselves [...] To implement measures against depression is wrong because there is no depression. Many businesses and companies would resist better if government didn’t hurt consumers spending power. It is the public finance system that is broken.”

The European Union would miss an invaluable partner if the Farages and the Knapmans impose their discourse on the Lawsons, the Milibands, the Camerons. The United Kingdom, of course, will lose much more.

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While most of the attention circles around the Spanish Treasury’s upcoming sale of €4.5 billion in 3, 5 and 13-year bonds, Afi analysts on Thursday said it is worth having a look at the non-government debt sector. Foreign investor appetite seems to be growing, and fears are on the receding trend.

Spanish financial entities and corporations have seen their market access improve, costs fall and maturities extended. In fact, up to 80 percent of issuances–some €30 billion so far this year–were bought by non-resident investors. Proof that confidence is on its way of being restored over non-Treasury Spanish debt, too, shows in the use of different currencies and hybrid products: Telefonica sold $2 billion in bonds and BBVA has placed €1.5 billion in convertible subordinated debt.

Broker Bankinter said it expects the cost of 10-year credit for the Spanish government to reach levels below the 4 percent mark during the next auctions.

In Madrid, news about Joerg Asmussen–the German representative at the European Central Bank–asking for a speedy Banking Union was also welcomed. Asmussen mentioned the difficulties of the Cyprus rescue as a “reminder” that the “negative interaction” between banks and sovereign debt must be cut, and the ECB should begin its task as eurozone banks’ supervisor as soon as possible.

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