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No end-game in sight for eurozone crisis
26 October 2011
Attempts by leaders of the 17-strong eurozone to resolve the sovereign debt crisis facing its members made some progress – but the story is far from over. Stephanie Baxter reports
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eurozone
Aberdeen Asset Management
Greece
CDS
Moves by eurozone leaders to shore up its ailing economy by agreeing a haircut on Greek debt and bolstering the firepower of the European Financial Stability Facility (EFSF), have failed to convince the market that a comprehensive solution has been achieved.Private investors will be asked to take a 50% haircut on the nominal value of their Greek government debt as part of plans to reduce the country’s sovereign debt to 120% of GDP – from their current 160% level - by the end of the decade. Details over how this will implemented were absent – and the crucial question of whether the write-down counts as a credit event, thereby triggering credit default swap payouts – were left unanswered, a point picked up by analysts. Darren Williams, European economist for global economic research at Alliance Bernstein, said that while the developments...
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