Jeremy Hobson: Global markets are breathing a big sigh of relief this morning thanks to the plan that has emerged from the big euro summit in Brussels. Here are the two key numbers in the plan: 50 percent — that’s the loss that the holders of Greek debt will have to accept. The other big number is $1.4 trillion — that will be the new size of the European bailout fund.
For more on all of this, let’s go live to Marketplace’s Stephen Beard who is live with us in London. Good morning.
Stephen Beard: Hello Jeremy.
Hobson: Does this deal address all the big issues? Or is this sort of like, you’re putting together the pie crust but you’ve left the lemon meringue out so far?
Beard: No, it’s not just the crust. But one ingredient that is missing is precisely how the enhanced bailout fund is going to be financed. It’s pretty clear that European governments — like that of Germany — don’t want to put in anymore cash. So they’ll be looking outside Europe for support.
The French President Nicolas Sarkozy is phoning the Chinese leader this morning, and not just to pass the time of day. Chinese help, however, is not guaranteed. China’s official news agency’s verdict on the euro summit is this: positive, but filled with difficulties — not exactly a ringing endorsement.
Hobson: Well Stephen, you’ve been covering this debt crisis for a couple of years now. Do you think this has the potential to be the summit to end all summits?
Beard: It’s probably not. It’s the fourteenth on this subject, probably won’t be the last.
Financial markets are celebrating but Marchel Alexandrovich of Jefferies International Bank says that may be due to their low expectations before the summit.
Marchel Alexandrovich: I think the fact that politicians managed to get around a table and produce a 15 page document — I think that in itself is seen as bit of an achievement.
Another prominent analyst says he thinks there will be a happy ending for the euro, but not just yet. He says this won’t be like a U.S. blockbuster movie, with one big punchline — it will be more like a French art house film, with lots of twists and turns and more drama to come.
Hobson: Marketplace’s Stephen Beard with us from London, thanks Stephen.
Beard: OK Jeremy.