The ‘To Do’ list for Greece, the EU and the IMF is still left unchecked after the weekend meetings. Step 1, confidence vote in the Greek government will be tomorrow which will then be followed by a parliamentary vote on the deficit cutting plan that meets the current EU/IMF criteria demands in order for them to release the next 12b euro tranche to Greece. If Step 1 complete, Step 2 will be finalization of a new bailout package that will include a voluntary debt rollover with the enticements for existing bondholders still to be determined. Step 2 seems to be a question of doting I’s and crossing T’s after Merkel and Sarkozy broke bread on Friday but we can’t get there until the Greeks themselves stick to their end of the initial bailout bargain in Step 1. While this soap opera continues, the underlying weakness of the global equity markets over the past month has been due to economic moderation and those fears continue in the two fastest avenues of growth, China and India. The Shanghai index fell to the lowest since late Sept and the Sensex dropped to the lowest since Feb.
