Daily Archives: July 25, 2011

Like most people who have been following the Greek debt crisis closely, we’ve been spending much of the last few days drilling down to figure out just what eurozone leaders agreed to Thursday night, since even market participants remain confused about certain elements of the deal.

For Brussels Blog, the key question was always the most straight forward one: how big is the hole, and how are you going to fill it? We found out how big the Greek hole was earlier this month, when the European Commission released a report that showed the gap in Greek financing between now and mid-2014 – a whopping €172bn.

But just how they are going to fill that hole has not been publicly acknowledged amidst the conflicting accounts of the plan’s details that emerged in the days since the summit ended. Thanks to a previously undisclosed document obtained by the Brussels Blog – and a little help from a big EU economic brain – we seem to have figured it out. Read more

Greek prime minister George Papandreou, at the end of Thursday's summit in Brussels

All eyes in Brussels will be watching the bond markets in the eurozone’s periphery this week,  particularly in Spain and Italy, where the danger of post-Greek deal contagion is most acute. After a brief relief rally after the bail-out package was agreed Thursday night, things have begun to look a bit shaky again.

Already, Moody’s this morning has joined Fitch in downgrading Greek bonds, citing the “substantial economic losses” Greek debt holders will incur under the plan. But it’s worth looking at a “special comment” Moody’s issued alongside the Greek downgrade, because there’s a bit of good news for European leaders in it. Read more