After a meeting with German Chancellor Angela Merkel, French President Nicolas Sarkozy gave indications that a deal was close on terms for a second bailout for debt-troubled Greece. He spoke about the need for haste in putting a package together, and said that France and Germany took the same position on Greece.
Reuters reported that the two leaders met Friday to discuss involvement of private investors in any rescue package; that has been a large obstacle on the road to an agreement, since ratings agencies regard any such element as an involuntary restructuring and have warned that they will rate Greece accordingly. However, Sarkozy's words seemed to imply that a deal was not far off. Prior to their meeting, German Deputy Foreign Minister Werner Hoyer said in the report, "I believe the meeting today will yield a solution. I am sure that they will come to a compromise."
After the meeting, Sarkozy said "there was no time to lose" in putting together a rescue package, and suggested that agreement must be reached by July at the latest. He added, "We want to go as quickly as possible without fixing a date."
Analysts took his words as positives for the market. Andre Bakhos, director of market analytics at Lek Securities in New York, said in the report, "After a couple of volatile sessions earlier this week, the market is taking Sarkozy's words as comfort and that is translating into a rebound this morning."
Much remains to be worked out; Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, was quoted saying, "To convince existing Greek bondholders to buy new Greek debt is going to be a gargantuan process. But the market will deal with that later. For today they're just happy that the French, Germans and the ECB [European Central Bank] look like they're coming to some sort of an agreement."