Thursday, October 27, 2011 at 7:10 AM
The consensus is that the agreement buys some time, but doesn't solve the continent's underlying economic problems. Still, failure to make progress could have been disastrous.
Marathon talks that ended around 4 a.m. local time today in Brussels produced a deal that European leaders hope will mark the beginning of the end of the continent's debt crisis, as NPR's Eric Westervelt reports for Morning Edition.
And financial markets are rallying on the news.
The Associated Press sums up the agreement this way:
"The strategy unveiled after 10 hours of negotiations hit on the three points expected for weeks. These include a significant reduction of Greece's debts, a shoring up of the continent's banks, partially so they could sustain losses on Greek bonds, and a reinforcement of a bailout fund so it can serve as a 1 trillion euros ($1.39 trillion) firewall to prevent larger economies like Italy and Spain from being dragged into the crisis."
So is everything fixed?
Not according to The Wall Street Journal's The Source blog. Here's the top of its post on the deal:
"OK, so the euro likes the look of this European deal on banks and Greek debt. And maybe it's even cheered by the 'spirit of solidarity' mentioned in some of the official statements. But make no mistake: this climb in the currency doesn't mean investors suddenly think the region has now been placed on a sustainable growth path.
"It is what market insiders call a 'relief trade.' In other words: things could have gone an awful lot worse. Phew."
That's basically what one analyst also tells Bloomberg News:
"The rally is more a reflection of the fact that expectations were very low," Philippe Bodereau, head of credit research at Pacific Investment Management Co., said in a telephone interview. "This has to be seen as an incremental positive but it is hardly 'shock and awe,' " he said. "There will be a bumpy road ahead."
And at The Financial Times' website, there's this analysis:
"In typical European fashion, a summit deal which seemed out of reach at midnight last night was triumphantly unveiled at 4 a.m. The deal does not, and was not intended to, have any effect on the core problems facing the eurozone. There is still an urgent need to restore growth to economies which are hamstrung by uncompetitive business sectors, and continuous fiscal tightening. Recession still looms, especially in the southern economies."
[Copyright 2011 National Public Radio]
This article is filed in: World News, Home Page Top Stories, News
Khaled El-Masri says he was mistakenly flown to a secret prison in Afghanistan by the CIA.
Civilians Flee, Soldiers Dig In On Sudanese Frontier
The U.N. is threatening both Sudans with sanctions if they can't reverse their escalating feud.
How To Address France's New, Unmarried First Lady
France's new president was inaugurated Tuesday, and he's moving into the presidential palace with his longtime "companion." Host Michel Martin and the Beauty Shop ladies weigh in on political protocol when it comes to heads of state, politicians and their unmarried significant others.
At Trial, Serb Gen. Mladic Taunts Survivors With Throat-Cutting Gesture
Charged with 11 counts of genocide, crimes against humanity and war crimes, he remains defiant.
Atlanta Opens New International Terminal
Officials hope the facility means more international businesses will choose to locate in Georgia.
News updates from WGBH