?Greece seemingly dodge a bullet on Tuesday with the announcement of a Eurozone-funded bailout totaling one hundred thirty billion Euro or $170 billion. As expected, the Eurozone stepped in near the last minute to help Greece avert a $19 billion bond default on March 20th. Calling the bailout unprecedented, and a step forward for Greece, Eurozone leaders emerged from thirteen hours of negotiations at 5:00 am. to announce the deal. With that, Greece is saved. At least for the moment.
Without doubt, a default on the Greek debt would have had implications stretching outside Europe and across the globe. Greek finance minister Evangelos Venezelos calls the deal the most important one in Greek post-war history. At the same time, questions abound about the effectiveness of the bailout, and its general advisability. Some say this is only the first in an unavoidable series of bailouts, and that it will only be until the next Greek debt crisis before more rescue money is needed.
The bailout is a cooperative effort between members of the Eurozone and holders of Greek bonds, who will be forced to accept a cut in repayment. Eurozone funds are to be used to pay Greek debts, with no access to the money given to the Greek government for any operating expenses or social programs. A burden of austerity is also imposed upon the Greek government, and it comes at a time of little public confidence in the government. Support has grown for leftist, anti-bailout politicians. Eurozone monitors will be in place in Greece in any event to watch over and ensure its compliance with bailout terms.
On Wall Street, the bailout was met with a modest welcome, and the Dow rushed ahead to break the 13,000 mark, before falling back to close below 13,000, although still up for the day. Little real regard is given by Wall Street traders to 13,000 as any dividing line, but that is the highest mark the Dow has reached since 2008. 13,000 is more of a psychological threshold. There is actually seemingly little confidence on Wall Street in the ultimate success of the bailout, and for this reason, traders are all the more pleased that the Dow reacted favorably. Confidence in the American market is marked by traders' ability to discount doubts about overseas fortunes. Commentators on Wall Street note that doubts remain about Greece's ability to service its debt on an ongoing basis. The Greek deal did not turn out to be as definitive as many on Wall Street had hoped. Still, though, it did stir a measure of confidence in Wall Street traders, and by hitting the 13,000 mark again after four years, the future on Wall Street seems exceedingly bright.
