The headlines are promising and positive, the EU have reached a deal, or at least the framework for a deal, to save the Euro from cataclysmic failure. The FTSE 100 is currently up 3.3% on the deal and the threat of a deep and long recession has reduced, or so it is claimed.
Sadly, when you think beyond the headlines it is not all good news. As part of the deal debt holders, including European banks, agreed to write off 50% of debts owed to them by Greece. Europe is providing no new money for the banks which are being expected to find the €115bn for this and the additional €20bn for the write-down of the Greek debt themselves. Continue reading