ESM-EFSF

The latest initiatives designed to stave off a Greek default are unlikely to be successful, for the same reason that previous measures have failed — namely, that they don't tackle the fundamental issues. In any case, trying to keep the eurozone together is the wrong goal.

The European Financial Stability Facility (EFSF) will increase its lending capacity to Eu440bn and stepped and the European Stability Mechanism will not have preferred credit status but such measures have failed to encourage investors that the European sovereign crisis is coming to an end.

One senior public sector banker set out this week to tell EuroWeek that the EFSF 10 year deal was a disappointment. When he reached the end of his analysis, however, he had to conclude that in fact, it was anything but.

Banks are gearing up for the second benchmark from the European Financial Stability Facility, which has circulated a questionnaire to the EFSF Market Group ahead of a deal that is expected in the second quarter.