Photo: Woodleywonderworks at Flickr
EU leaders met for more than 10 hours on Wednesday into Thursday to discuss important changes to their July agreement to expand the European Financial Stability Facility and bail out Greece.Expectations were really negative for the summit, with rumours circulating that few numbers will actually be released on the amended plan. We still thought that some important progress will come from this meeting.
rumours circulated all day, with many finally becoming true as details from the talks emerged:
– EU leaders and bank representatives agreed to 50% haircuts on private sector holdings of Greek bonds.
– China is indeed very involved in these bailout talks. French President Nicolas Sarkozy waxed enthusiastic about Chinese involvement, and said he will call Premier Hu Jintao tomorrow.
– The IMF will play a role in leveraging the EFSF.
– The leverage plan still seems a little convoluted — it’s probably going to give the EFSF a firepower of $1.4 trillion with 4-5 times leverage.
– Everyone’s convinced Italy is really committed to cutting its debt and pursuing policies for sustainable growth.
Read through below for the play-by-play.