Wednesday, 2 November 2011

A Question

As the Greek referendum fallout continues, (Richard North has excellent analysis of Papandreou's strategy), a thought has occurred to me. Will the Greeks even know what bailout package they'll be voting on given that it doesn't actually exist yet?

The deal announced to great fanfare last Thursday was vague, and short on details. The details have yet to be hammered out on the banks agreeing to voluntary haircuts, on leveraging the European Financial Stability Facility (EFSF) effectively to a trillion euros, who pays, and whether the bank recapitalization program is even sufficient.

And EU finance ministers are not expected to agree on these nitty-gritty elements of how the EFSF will work until sometime in November, with the exact date not fixed. It is probable that agreement on it and other elements of the deal will drag on longer maybe into next year (if at all).

As the referendum might take place as early as December, the Greeks may end up effectively voting on a deal that no-one knows what it is.

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