Greece is at the center of all attention. The European leaders say to have find an exceptional solution to help the country from defaulting. However, when we watch more clearly what decisions have been taken, this “effet d’annonce” sounds more like a marketing message in order to reassure the markets but doesn’t cure the problem. A lot is still to be done if Euro Zone wants to get out of the crisis.
Last May 2010, when Greece financial budget was already at a breaking point, the ECB plan of aid to Greece involved mainly the purchases of Greek bonds in the secondary market, a loan of 110 billion euros by countries in the euro area and the IMF. Currently, a second plan is on its way. Which we think is insufficient, poor and unrealistic. In figures, there is a talk of a second loan of 109 billion euros and a program of purchases of Greek bond in the secondary market by an intistitute that will be the equivalent of the US Fed. So there is still no real decision that have been made, it is just a compromise. The problem is that such purchase have to be decided unanimously by the States in the euro area. This makes the plan very problematic. Virtually, we suspect European leaders, especially those from the richest countries, to wait until the USA have made a decision on their Q3 program.
This second plan for Greece is just like kicking the junk further before a possible third plan. In all this, what about Portugal, Italy, Ireland, and Spain… There budget are not good at all either…