European Agreement

The agreement reached today by the European Union include the following:

1. $1.4T EFSF (1 trillion euros). Fund will be used to insure bond sales and to create a special investment vehicle which would court outside money.
2. 50% haircut to Greek bondholders.
3. Involvement of IMF in bank recapitalization
4. Continued ECB involvement in the secondary bond market.
5. Italian commitment.
6. Recapitalization deadline of June 30, 2012 for lenders to reach 9% core capital reserves after the write down for sovereign debt holdings.

More details to follow.

Is it enough?  Not sure.  Even $1.4T seems too low to help an economy the size of Italy but this is a step in the right direction.  Fact is that this agreement exceeded expectations and it seems like Europe is trying to get in front of the problem.