EU Summit Short Summary

- Markets rally 2% friday afternoon to get to a positive expectation for some sort of resolve over the weekend - this coincides with the key 1230 level being broken to the upside.

- liquidity issue (solved with bridging loan) and insolvency issue (debt restructure) - Greece is the latter, and the rest of the countries are the former.

- The number for the EFSF is 780bn, but there are rumours of a 940bn increase.

- The fund is big enough to support, Portugal, Greece, Ireland and Spain but NOT Italy - although many analysts think that Italy won't need it.

- So we are looking for 1/ Leveraged EFSF 2/ Bank Recap (euro100-250bn) 3/ specific reform proposals in the south EU including European Stability Mechanism 4/ aggressive haircut for Greece debt around 40-50%