Sign up for free newsletter

 

Barry Norris, partner, Argonaut Capital Partners

Now the hard work starts for Europe


Last night's announcement of an agreement between Euro-zone leaders and EU banks on the restructuring of Greek debt, recapitalisation of banks, leverage of the EFSF and a move toward common economic governance within the Euro-zone was the most credible political response to date to the sovereign debt crisis, says Barry Norris, partner, Argonaut Capiral Partners…

Whilst markets are relieved in the existence of a policy response, details of key parts of the plan such as the EFSF are vague and may not stand scrutiny. It is doubtful whether even after a 50% haircut for private creditors, the level of Greek debt is sustainable.

There also looks to be significant wiggle-room for banks to avoid the necessary degree of recapitalisation. New Italian and Spanish governments are needed to undertake credible economic reform and in Rome urgently turn a budget deficit into a surplus. Ultimately, the single currency needs a Euro-zone political institution with executive power over fiscal policy. All of this seems like nit-picking today, but in the months ahead, markets will focus on these key issues.
 
EU leaders have bought time. Now the really hard work starts.

events
18 hours 59 min from now - County Wicklow
3 days 18 hours from now - London
1 week 1 day from now - London
listingsdirectory
Meyler Capital
Tue, 06/09/2016 - 15:57
Nasdaq
Tue, 30/08/2016 - 11:02
Edelman
Thu, 18/08/2016 - 10:14
training
Wed, 28/09/2016   - London
Thu, 29/09/2016   - London
Thu, 29/09/2016   - London
specialreports
other gfm publications