Markets cautious over Greek debt deal and whether it can save it from default and euro exit

Markets reacted cautiously Tuesday to the news that Greece finally secured its second massive bailout in less than two years, which is aimed at giving the debt-ridden country the breathing room to enact widespread economic reforms and set it back on the path to growth and prosperity.

That is the most optimistic hope in Europe’s capitals but with many hurdles still to be cleared and the country still lumbered with massive amounts of debt even after its private creditors agreed to a huge writedown of debt, the prevailing view in the markets is that Greece remains insolvent and that its debt crisis still has a few more chapters to run.

“This deal clearly does not solve Greece’s problems or that of the rest of the eurozone.

What it does do is buy some time,” said Louise Cooper, markets analyst at BGC Partners.

“This deal does not rule out a breakup of the eurozone. It does not rule out a Greek default in the future, it does not prevent contagion and does not help the wider eurozone indebtedness problem.”

From: Canadian Business