It is entirely clear that the ‘deal’ concocted by the 17 eurozone premiers and presidents at the Brussels summit and unveiled at 4am local time on Thursday 27 October is simply fancy and fantasy.
First one needs to sprinkle any analysis with large doses of ‘alleged’ – as in ‘alleged deal’, ‘alleged agreement’ ‘alleged action’, and ‘alleged welcome’ as in ‘We welcome Italy’s plans for growth …’
In the words of Wolfgang Munchau in the FT,
The day may yet come when the eurozone finally agrees a comprehensive package to end the crisis, but this was not the day.
The bounce on stock markets through Thursday was nothing much more than whistling past the graveyard and on the eve of Halloween weekend to boot – entirely appropriate and of course by Friday everything was beginning to feel eerie with markets beginning to go off and the alleged Italian plan looking more like The Italian Job.
Second the spectacularly disastrous condition of Greece – and what has caused this collapse – needs to be gleaned from the communiqué. Third, the banks recap is smoke and mirrors while finally the general scheme of it all, EFSF2½, is imaginative fantasy in the tradition of that children’s tale, The Magic Pudding.
But first to return to the condition of Greece. Read the rest of this entry »