Photo: Wikimedia Commons
Goldman’s Francesco U. Garzarelli and Huw Pill offer 6 takeaways from this weekend’s emergency meeting in Europe.We summarize:
- A “Crew Cut” For Greece: Basically, due to deteriorating fundamentals, it’s not certain that big haircuts for bondholders are an inevitability.
- A larger bank re-cap: The number is now up to 100-110 billion EUR.
- External support for the EFSF?: There’s definitely chatter about more IMF/SWF/BRIC involvement to leverage the EFSF, which would be viewed as a market positive.
- Italy Holds The Keys: Italian reforms must happen right away. Berlusconi is already holding emergency cabinet meetings.
- Towards Treaty Changes: There’s some nascent movement to treaty changes that would see more fiscal integration.
- Redistributing Growth: Plans are underway for new schemes, likely via the European Investment Bank, to boost growth in the periphery.