Re: Re: Eurozone Dominoes Falling!

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logan
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Markets always react positively in the short term to what they initially see as good news. Any excuse will do. Once the facts are digested and the bailout terms considered there is always a difference response.

The fact is that €100bn will add 10% to Spain’s deficit to GDP. The bailout appears to be conditional on Spain hitting it’s fiscal targets this year. Germany also seeks further reforms through out the Spanish financial sector. We still have to discover what interest rate Spain will pay.

For Rajoy to claim a victory is simply dishonest but we expect that from them. The real market reaction will start next week.

This is a short term fix, EU style kicking the can down the road and will do very little to improve the situation.

That Forbes article mirrors my own opinion and that of JP Morgan in that the real bailout figure required by Spain is close to €350bn.