QUO VADIS?

Well, the deal got done and now I think it is appropriate to ask where do we go from here?  Firstly, however, I must again admit to being a bit wrong in regard to my ststement that the Greeks would never accept an in-country monitoring group because there was mention of one in the release of the terms of the deal.  It's function was considerably reduced, however.  Rather than being there to set policy as per the original demand, it will be present to monitor only, which I guess it means it will serve as an early warning system as to the certainty of when the Greeks fall out of compliance.  But we get through March; can June be far behind?

Where will we go?  There will be a cool down period probably lasting for a few months as more focus will be placed on macre economic conditions both over there and over here, in addition to the global security questions focused primarily in the Middle East.  There are very important national elections both here and there and a great shift of public interest is certain to occur especially in Euroland over the near term.  In short, the best thing that can happen is for people to have their minds on other things except that with the traders may have it come out another way if they shift pressure to either Portugal or Ireland or both.  Frankly, I can envision a scenario where politics may provoke a logical questioning in both countries along the lines of, "If the Greeks got theirs, why can we get ours?"  Awkward, that.  Remember, the Irish bailed out their banks on the backs of the Irish taxpayer (I know, me neither).  A bit of debt relief would help mightily as the program for economic growth is already in place.  Portugal amounts a speed bump.  What would you prefer?  A market/trader/speculator driven rescue or a rational appproach that pre-supposes an eventual need?

And what of Greece?  It is madness it seems to me to hope for any upturn in either this or next year.  Every cent of cash flow from whatever source is going to be transferred out of the country.  Frankly, at some point Euro governments will be forced to recognize that good money after bad is not a sustainable policy and it will end.  I would argue, therefore, in this breathing space it would be a very good idea to get proactive (I hate that word) with both Portugal and Ireland or future events will certainly overtake them.  Mind you, I'm not saying that this immediate saga is over; this agreement is fragile as can be and could still fall apart, only that the players are in place and now is the time to move forward into other obvious areas of concern.  I'm going to try to focus on other things in the coming weeks with the caveat that we'll be ready the return to the scene of this crime if events demand.  A change of pace will be fun.