Despite the best efforts this month by policymakers to put in place a long-term crisis management framework for Eurozone countries, the immediate task of managing the disparate needs of the strong core and weak periphery is a puzzle with no obvious solutions.

That was the consensus, at least, of panellists trying to assess the cost of the Eurozone crisis at the latest Credit Institute event, held in London on March 24. The discussion was moderated by Duncan Sankey, portfolio director and head of credit research at Cheyne Capital.

Rising inflation is an obvious concern for the European Central Bank, making it all the more likely it will increase interest rates in the near future, perhaps even as early as April. But while such a move might strengthen the euro, and even be welcomed by stronger economies, it could prove counterproductive.

"Any growth is good and a prerequisite [for economic recovery]," said Arif Husain, director of UK and European fixed income portfolio management at AllianceBernstein. "But a strong euro is no good for anyone because that kills European growth, and means the austerity taking place will become negative instead of positive. For the whole thing to stand by itself, you need the euro to stay relatively weak."

"It is not right to think that one size fits all," added Holger Mertens, portfolio manager and analyst at Lazard Asset Management. "In Europe, you can have an economy like Germany that is growing quite fast at the moment, where maybe an increase in rates might be necessary. But there are also other countries where increases at this point in time might cause problems."

Even in the early stages of the Eurozone crisis, there was no shortage of commentators lining up to say monetary union cannot work without fiscal union. Credit Institute panellists agreed fiscal co-ordination is necessary, but acknowledged it is easier said than done.

"The problem is that you are ultimately talking about differentials in growth. When you factor in the way Europeans seem to be approaching things - if you remember they actually put rates up at the start of the financial crisis - it doesn't give you a great deal of confidence they are going to react in a different way now," said Simon Bond, investment manager at Threadneedle Investments.

"It is important to have a strong fiscal framework but many of the countries within the Eurozone just don't have that," said Azad Zangana, European economist at Schroders Investment Management. "Countries like Greece literally don't even know where to start cutting the deficit. When you speak to politicians in Greece, they don't know how many assets they've got; they don't know where their liabilities are coming from; they can't even keep the basic balance sheet going."

There was debate amongst the panellists about how investors should position themselves in such a challenging environment. Bond said the experience of emerging market corporates performing strongly even when their domestic economies were struggling provides useful insight for the current situation in Europe.

"If you take Russia as an example of a country that has gone through an economic crisis, Gazprom got through that because of the nature of its earnings, and there are other examples [in other countries]. Companies that are domestically focused in regulated industries and which, during a normal slowdown are the sorts of companies that would provide protection, may not in the case of severe sovereign stress be as well positioned as perhaps you think they should be," said Bond.

Given the close linkages between sovereigns and financial institutions, working out which part of the capital structure investors in financials should be exposed to is an area of persistent focus. With uncertainty on whether senior unsecured debt could suffer haircuts in future regulatory regimes, Zangana believes value can be found at opposing ends of the capital structure.

"The best option would be to invest through covered bonds and contingent convertible bonds: on the one hand you are getting yield and on the other you are getting security. That is probably better than sitting in senior debt where you can be subordinated by the covered bonds that rank above you in the capital structure," said Zangana.

None of the panellists disagreed with the aim of policymakers to ensure private creditors take their share of the pain in future bailouts of financials or sovereigns. But what bond investors desperately want is clarity on how such a process will work.

"If I invest in a company that goes bust, I should take some of the pain for that eventually. But we saw what happened in Ireland with senior bondholders recently [where the authorities kept changing their position on whether bonds issued by Irish banks would be haircut]. What we need is a framework so at least we know what to expect if the banks get into trouble," said Mertens.