The deal

29th November, 2010

Everyone is talking about the IMF/ECB deal today. As well they should. Will have a major impact on our country. Am going to reserve judgement until I read the text of the announcement. Here are some of my main questions though.

First – the interest rate. The benchmark isn’t Greece, but the interest rate scenarios of the 4 year plan and the market rate. How does it stack up against them?

Second – the composition of this rate. What funding bundle has the highest rate – the sovereign or the banks?

Third – where is the space for stimulus? Without this the whole thing is a house of cards.

Final – what do the debt scenarios look like? What is our likely debt/national income trend line – remember target must be to get below 100% in a credible manner.

I’ll read the plan soon and post thoughts in the above areas.