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The markets rallied again...while the euro sank on the second day...as euphoria dissipated over turning the eurozone's 15-month-old bailout fund...into a fledgling monetary fund.
The 15-point draft agreement requires private investors to take "haircuts"/losses of about 21% on their current Greek bonds...making it likely Greece will endure some form of temporary "selective" default before new bonds are declared junk...in the mammoth $157b/e109b deal.
Some economists believe 65% investor haircuts were required to Greece a fighting chance.
Also important for the stressed PIIGS...Greece, Ireland and Portugal will now pay much lower interest rates...3.5%...than previously demanded.
Greece will reportedly have access to new loans...as long as it takes...until private lenders step-up.
Chancellor Merkel has agreed to ram the agreement thru the German parliament where opposition to another Greek bailout has been growing...described mockingly by some media as a "transferunion."
FOR cynical analysis....by N. Pratley:
http://www.guardian.co.uk/business/2011/jul/22/greece-debt-relief-not-enough
