29 June 2012

Don't hold your breath

Problem sorted?  Eurozone on the path to stability?  Maybe ...  The BBC reports:
EU leaders have agreed to use the eurozone's bailout fund to support struggling banks directly, without adding to government debt.
Speaking after 13 hours of talks in Brussels, EU chief Herman van Rompuy also said a eurozone-wide supervisory body for banks would be created.
Officials said the plans could be finalised during July.
Analysts say Germany appears to have given ground after pressure from Spain and Italy to provide more support. 
Not sure if there is enough in the kitty (either the EFSF or the ESM or both).  After all, the Spanish banks may need 100 billion euros; what cost for the Italians, Greeks, Portugese and Cypriots?  And, if the details have yet to be finalised, there is more than sufficient room for the agreement to fall apart.

Update:  I see the FTSE 100 has climbed by 1.59% this morning; the French and German equivalents have gained 2.78% and 2.52% respectively.  Will they never learn?


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