Markets Avoid Strong Reaction as Deal Is Sealed

Wall Street Journal
February 22, 2012

It took half a year of negotiation and a final, 13-hour push to seal a Greek debt deal in the early hours of Tuesday morning. But the financial markets that had long been captivated by the Greek drama barely shrugged—and certainly didn't register any bouts of relief.

Major European bourses were all lower Tuesday; the German DAX fell 0.58% to 6908.18, and the CAC-40 in Paris shed 0.21% to 3465.24. The euro, after a quick overnight bounce, had returned by late evening in London to its level of a day earlier, at $1.3241. Yields on Spanish and Italian bonds declined slightly.

The deal, which pairs €130 billion ($171.9 billion) in new aid funds with a debt restructuring that slices off just over half of the face value of bonds held by private investors, had been largely telegraphed during the final weeks of bargaining between austerity-weary Greek politicians and the frustrated euro-zone countries putting up the rescue money.

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