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: Calculated Risk

Europe Update

By Anonymous

As Letterman said last night "What are we supposed to pay attention to, Libya or Japan?? (ht Brian)

We could add Yemen, Bahrain, Saudi Arabia and more to Letterman's list (maybe he should do a top ten world problems - but unfortunately it would be serious).

The 27 EU leaders meet on Thursday and Friday. In advance of that meeting, the Finance Ministers have reached agreement on the permanent bailout fund, from Reuters: EU finance ministers agree on capital, ESM loan pricing

The euro zone's permanent bailout fund, the European Stability Mechanism ... which will have an effective lending capacity of 500 billion euros, will be backed by 80 billion euros of paid-in capital and 620 billion euros of callable capital ... It will offer loans at funding costs plus 200 basis points for loans up to three years and plus another 100 basis points for loans longer than three years.

The temporary EFSF has a 300 basis points margin and a 50bp fee.

Here are the 2 year bond yields from Bloomberg for Ireland (over 10%!), Portugal, and Greece. And here are the ten year yields for Greece, Ireland, Spain, and Belgium. The focus will be on Ireland and Portugal at the meetings this week.

Full post as published by Calculated Risk on March 22, 2011 (boomark / email).