Lazard has been hired to assist Greece with its finances.
The speculation is Lazard has been hired to assist Greece with a restructuring of its debt. That, of course, has been denied. These guys always deny, deny, deny until it's done.
When the European Monetary Union was formed no member nation could exceed a deficit to GDP of more than 3%.
Greece's looks like it will top out at 14% or more this year. And there are several others well above the 3% level. There were to be no bailouts (yeah, right to that one) and collateral for banks had to be above a certain rating. That last one was blown away recently when Greece's debt was downgraded and the EU realized that debt sat on a lot of European balance sheets. Some $1.7 trillion of Greek debt (and Portugal, Ireland, and Spanish debt) are on bank's balance sheets around the world with, apparently, half of it held by the Germans and French. Maybe the EU felt they had no choice.
But only a few weeks ago Trichet was promising there would be "no exceptions" to the collateral rule. (Today Trichet says- Euro Zone Economic Outlook Uncertain.)
On my side of the business we always get a lot of "good till close" orders. You know, I will buy XYZ if only it gets back to $X. Once close to that price the order is gone.
That has been the nature of this business since it started so it's never a surprise.
The EU, however, has blown a lot, if not all, its credibility by the recent cut and run policies. They may as well throw in the towel and step up to what needs to be done and vote at their meeting Thursday morning to step into the market and buy sovereign debt. Quantitative easing we wizards of Wall Street call it. Far from being over, this crisis is threatening to spread.