Euro zone deal; the devil is in the details

Reuters has an excellent summary of the last minute deal struck by EU leaders last night that would give a 50% haircut to private Greek bondholders while adding leverage to the EFSF bail out fund that pumps up its total to one trillion euros. Only the broad outlines of a deal have been finalized. The EU finance ministers must now get together and work out the prickly details. This means the whole thing could fall apart in the next few weeks if no agreement on how these plans will be implemented is struck. But key aspects of the deal, including the mechanics of boosting the EFSF and providing Greek debt relief, could take weeks to pin down, meaning the plan to rebuild confidence after two years of crisis could unravel over the details. "I see the main risk is that we are left waiting too long again for the implementation of these agreements," European Central Bank policymaker Ewald Nowotny said on Thursday. "Speed is very important here," he told national broadcaster ORF. Three months...(Read Full Post)