Eurozone crisis live: Spanish bank restructuring approved, as questions mount over Greek debt deal

Good morning, and welcome to our rolling coverage of the eurozone financial crisis, and other key events across the global economy.

It's now 32 hours since the Eurogroup announced it had reached an agreement on Greece, and the shine is now coming off the deal.

While there is still relief that the immediate danger of Greece not receiving its bailout funds has been averted, there is growing concern that politicians have not been straight with the public over the actual cost of cutting Greece's debt pile.

As German financial group Commerzbank puts it:

The whole structure of the Greek aid deal intentionally concealed from the taxpayers

We will highly likely need to negotiate the sustainability of the?Greek debt again in 2014, but a clear haircut now would have been much better with regard to the transparency for the taxpayers.

Eurozone finance ministers have insisted that the latest deal does not include any debt forgiveness for Greece. However, the Financial Times is now challenging this, saying it has seen document that show euro governments could be forced to accept losses on their rescue loans.

The FT explains:

The series of measures agreed, which could relieve Greece of billions of euros in debt by the end of the decade, do not go far enough....

The agreed measures will only lower Greece?s debt levels to 126.6% per cent of economic output by 2020, not the 124% announced by eurozone leaders. This shortfall will be addressed once Greece has a primary surplus:

Because the deal already cuts interest on loans to just 50 basis points above interbank lending rates, any further cuts would almost certainly force losses on to eurozone creditors.

And that also probably won't happen before 2014 ? after the German elections.

Bloomberg is also unimpressed, arguing that this new scheme - Plan C - is really no better than what's gone before. Only full debt relief can help Greece, it argues:

When the time comes to craft Plan D, Europe?s leaders would do well to move ahead with the Greek debt writedown they have tried so hard to avoid.

If, for example, they cut the government?s debt in half, and if its market borrowing cost could be brought down to about 5 percent, Greece could hold its debt burden steady by running a primary budget surplus (excluding interest payments) of roughly 1.5 percent of GDP - well within the range of what it has been able to achieve in the past. The upfront costs would be greater, but so would the chances of success.

The rest of the eurozone probably understands this all too well. As Sky News's Ed Conway puts it:

On the basis that if Jean-Claude Juncker denies something, it's probably true, it's worth examining the deal cranked through in Brussels last night to "save" Greece....

Were this a private sector loan agreement, the probability is it would be regarded as a technical default.

So, the deal's honeymoon is over.

As usual, I'll be tracking developments across the eurozone throughout that day.

Source: http://www.guardian.co.uk/business/2012/nov/28/eurozone-crisis-greek-debt-deal-questions

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