Notwithstanding the reactions from the markets to the Euro deal, the reactions from some Euro trackers and economists are pretty pessimistic.
Looking at some of these reactions, it seems that the current Euro deal is another example of kicking the can down the road.
Here’s what Nouriel Roubni says in his Tweets:
“The EU agreement is much less than needed. Markets delusional in cheering this half baked agreement that has little details in it.”
“ESM is senior to private claims. So how can loans to Spanish gov 2 recap banks be pari passu with bonds? By using the to-be-phased-out EFSF?”
“Only 2 pieces of a banking union in EU deal: joint supervision; direct ESM bank recap. Missing 2 key parts: EZ-wide depst ins; insolv regime”
And here is Tyler Durden on ZeroHedge:
“The early Friday morning release of an entirely conditional 'plan' for a 'plan' that will likely require the ESM contracts to be torn up and a new contract to be re-ratified (by ALL members - including Finland and Germany), due to the stripping of the ESM seniority via the EFSF 'workaround', was high-fived by any and all EU leaders still standing. Is it any wonder (given the conditionality and ratifications required) that the best the market could manage, on what is now obviously nothing but yet another watered-down talking-point ridden 'promise-of-more-to-come' plan (as opposed to the impossible becoming possible as Ireland's Kenny so eloquently described it), is a 1% pop in US equity futures”
After some 20 euro summits and some three years of the Euro crisis, this one too seems to be just another promise of a plan, rather than concrete action.