"News" (anything that matters, economically at least) is thin on the ground so far today, mainly due to the US holiday that means the markets and Washington are out of action until tomorrow.
There is also a baited pause while the world waits to hear the outcome of the European head-honchos meeting, where they will decide what to do about The Greek Question. Whatever the outcome from this meeting when it is published, we can expect fireworks of one kind or another to kick off.
My guess is that the Germans will pull back from the recent hints it could fire in with a big stack of cash for the Greeks to stop the Euro project getting bust wide open with attacks on similarly debt-afflicted countries around the bloc. I think that the German financial-lever-pullers (a) can't really afford it anyway because they're up against a wall themselves like everyone else, not that this has stopped any government from doing it just the same recently of course, and (b) now understand clearly that their voters will crucify them at the next opportunity if they do, which is the more pertinent consideration.
What is needed is a way to say that the ECB will print up whatever Euros are required to ensure the Greeks (and the Portuguese, Spaniards, Italians, et al) will be able to rollover their maturing bonds. But to do so in a way that doesn't make anyone think rampant money-printing inflationary hellfire approaching so they sell sell sell the Euro into oblivion. A tough ask.
Perhaps the solution will be for the ECB to buy Greek debt bonds for the next few months, so there is no question about their ability to finance those debt rollovers at reasonable rates of interest, but at the same time the Germans can say that their taxpayers are not the ones footing the bill while the rest of Europe goes out for a free party. This seems to me like it would be the least-bad among the options.
We'll find out soon enough, later today...
Monday, 15 February 2010
Quiet day today. What next for the Greek issue..?
Subscribe to: Post Comments (Atom)
Post a Comment