The overture has begun: with an EU summit scheduled this weekend in Brussels, the twists and turns, the will they/won't they reach agreement soap opera is underway. And in the middle of it: a Kodak moment.
Yesterday, Carla Bruni Sarkozy, wife of the French President, gave birth to a healthy baby girl. The French Prez missed the delivery, raced to the hospital, spent a few hours with wife and daughter, then raced to Frankfurt to meet Chancellor Angela Merkel.
Their mini-summit ended without any news ... apparently details of how the European Financial Stability Fund is to be organized are still being haggled over ... along with the size of the haircut the private banks will take on Greek debt.
Result: markets opened down across Europe.
This is a twist from earlier in the week when markets closed up following a report by the Guardian's man in Brussels, David Gow, who wrote that a deal to turn ESFS into an insurer of euro zone members bonds was effectively done. (see previous Europa postings). The ESFS is expected to be capitalized at around 440 billion euros ... via the insurance wheeze its actual value was supposed to be inflated to 2 trillion euros. (Don't ask me how that works ... I've been asking people who make a lot of money in the markets how it would work and they have no bloody idea),
Anyway, the insurance thing is not happening, according to Gow on the Guardian live blog of the crisis. " ... confirmation comes that the putative size of the enhanced bailout fund, the EFSF, and of the revised "haircuts" on Greek debt depends entirely on to whom one talks. What was true one day may be untrue the next (as this correspondent knows via impeccable sources). Thus, the idea of turning the EFSF into an insurer had a huge amount of traction earlier this week but may now have run out of puff."
Other cheerful notes from Europe:
Revised German growth figures are due later today ... they are expected to show growth slowing in 2012 (just two and a half months away!)
Day two of a general strike is underway in Athens ... more clashes are expected. Good footage here.
BRITANNIA STILL RULES THE WAVES!!
Britain's Ministry of Defence has just sent out this press release.
"A dhow pirate mother-ship involved in attacks on merchant shipping in the Indian Ocean has been stopped and boarded by ships from the Royal Navy operating in the Indian Ocean.
It is believed the dhow was hijacked by suspected pirates so that they could use it as a base, or mothership, from which to launch attacks against merchant ships many hundreds of miles from Somalia. Throughout this time, the Pakistani crew of the dhow was held hostage on board."
No word on whether the Royal Marines boarded the dhow with cutlasses.