On July 21st, euro zone leaders agreed to extend the European Financial Stability Facility’s (EFSF) mission – including the possibility of acquiring national debt on the market – and ushered in the participation of private creditors who would be able to exchange old Greek bonds (also known as debt rollover).
If, at the time of the announcement, investors seemed relieved, it may have been premature. The agreement has yet to be fully ratified.
In France, for example, the nature of the EFSF’s changing mission must be passed by Parliament. The special session that is set to validate the European agreement will only start on September 6th.
The EFSF process may be viewed as too slow, too late, and too bureaucratic for many observers and analysts. Thus, the much hailed second bailout plan for Greece may not have the reassuring effect on the financial markets that was hoped for.