Monday, September 26, 2011
A eurozone rescue?
Posted by David Smith at 08:30 AM
Category: Thoughts and responses

The market response to weekend reports of a comprehensive eurozone rescue plan is mixed, perhaps with good reason. It is not clear how much the plan - leveraging the European Financial Stability Facility up to around 2 trillion euros, recapitalising European banks and a 50% Greek default - represents a workable rescue plan or wishful thinking.

I suspect we will see something of this nature emerge over the coming weeks. Until the details emerge, however, markets are likely to remain sceptical. The danger is that when the details emerge, it will all have been priced in. But it has a fighting chance of pushing the problem well into the future, and rather more than anything so far.