CIAO DATE: 11/2011
November 2011
After protracted negotiations, Eurozone leaders finally agreed on a new package of measures last week. The outline deal has a three-pronged approach aimed at tackling the main aspects of the crisis: reducing Greece’s debt burden, avoiding a credit crunch by recapitalising European banks, and preventing contagion to other countries via a boost to the EFSF. But while the initial market reaction was positive, with a substantial relief rally, this rally is already fading. One problem is that the terms of the deal are vague - Eurozone leaders have only been able to agree on a bare minimum of measures ands words. There are uncertainties about the details of the proposed Greek debt swap, and significant concerns about the plans for the EFSF. And the deal continues to rely on rather optimistic assumptions, such as plans that Greece will raise an extra €15 billion in privatisation on top of the already very ambitious €50 billion set out in the previous deal
Resource link: Eurozone finally agrees a deal but uncertainties remain unresolved [PDF] - 44K