David Fuller's view So the Greek debt problem has been solved. If Greece finds itself unable to raise money in the bond markets, then some combination of IMF/EU funding will kick in (although very loosely specified at this stage), but in that eventuality chaos will
already be centre stage. Greece will not be getting any favours from the EU on the rate of interest it will have to pay (currently over 6% and nearly twice the rate of 10 year German bunds). They would normally expect to pay less via the IMF, but the currency devaluation lever they would normally pull is not available in the eurozone.

The EU leaders (and there are a confusing plethora of them) say this is a triumph for European co-operation. But only days ago Jean-Claude Trichet, head of the European Central Bank, said it was a "very, very bad idea" to let the IMF into the eurozone. He has now done a volte face after Zhu Min, the vice-governor of China's central bank, weighed in with his concerns about the lack of EU cohesion over the issue and the implied threat that Chinese support to the eurozone sovereign debt market would be less forthcoming.


"Sauerkraut's on the menu": My thanks to Clive Hale for this accompanying cartoon: