Here’s the latest that’s happening in Europe, with just a few hours until Asian markets open up and officially commence the new week.
Angela Merkel’s party, the CDU, has lost an election in North Rhine-Westphalia, with the left party Social Democrats coming in first. The loss is seen as a rebuke of her handling of the EU crisis. The loss also threatens the CDU’s control of the upper house of parliament.
Meanwhile, EU leaders and the IMF have come out — yet again — with pledges of Greek support.
Basically there’s more money involved, and the announcement would suggest that there are no longer any hurdles to disbursement of the cash. It’s being handed over right away, or at least that’s what leaders would have you believe. You can read the full IMF announcement here.
Already, the euro is ticking higher in early trading, though we’d caution that it has spiked up before on weekend bailout announcements, only to see gains melt away on realisation that the emperor has no clothes.
What’s clear is that this isn’t a “bazooka” the likes of which everyone expected to be fire off. There’s no quantitative easing (yet), and certainly nothing radical that likes of which would help Portugal or Spain. This is a one-off, stop gap bailout.
That being said, some more details are expected to come this evening. Maybe we’ll get something more radical then.
For now, we wait.
Update: The latest rumour is of a 500-$600 billion EUR fund.