Wednesday, February 10, 2010

The Euro zone.

I have written about the prospects for the Eurozone on a philophical basis here, but this blog is devoted to more quotidian and practical issues.

Tomorrow, France and Germany will likely announce rescue measures for Greece and perhaps set procedures for rescuing other countries in the EU.

Spreads narrow, but should widen (by that I mean the risk premium will increase from previous "normal" levels) as the market realizes this sets a dangerous moral hazard risk in addition to not solving total debt to GDP ratios for the EU as a whole.

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