Thursday, February 11, 2010

Greece secures a rescue, stocks don't care too much

European leaders agreed in principle to put together a package of loans for ailing Greece.

The general idea is to shore up Greece's situation, in the hope it will relive pressure on other EU member states' spread problems (the higher yield necessary to attract new debtholders).

Polish Prime Minister Donald Tusk told reporters earlier that the aid, which would amount to the first bailout of a euro zone members since the currency was created 11 years ago, was likely to come in the form of loans.
"It could be voluntary loans from member states. That seems to be the best option," Tusk said.
European leaders are keen to prevent Greece's woes from spreading to other highly-indebted euro-zone members like Portugal or Spain, plunging the currency area into a bigger crisis that could reverberate around the globe.
Even with EU support, the Greek government faces a daunting challenge to consolidate its budget and restore confidence in an economy whose imbalances were exacerbated by the economic and financial crisis.
Greek public sector union ADEDY said on Thursday it would join in a February 24 strike called by private sector union GSEE to protest government austerity measures, underscoring the risk that social unrest could hamper the Greek consolidation drive.

US shares are slightly negative a few minutes before the opening bell, and European shares are largely mixed on the news.  The lack of clarity on details of the aid package may be a reason...

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