Can the Greek bailout contain the oil slick of sovereign debt?

Martin Vander Weyer’s Any Other Business

The downside of globalisation is contagion. That was the lesson of the Icelandic ash that damaged the livelihoods of Kenyan rose-growers, and it’s the lesson of this week’s Greek bailout. The deal that will see Greece’s euro partners stump up E80 billion, plus E30 billion from the IMF, touches millions of people who have never given a thought to the parlous state of Greek public finances. Crude oil blipped up on ‘buoyant sentiment’ while the Mexican peso looked perky, reflecting a view that riskier assets might be back in fashion. US Treasuries dipped as institutional investors felt less need for the refuge of US government paper — but gold perversely strengthened, habitual doomsters in that market still seeing the need for a safe haven against the threat of a wider sovereign-debt crisis. And hard-pressed Irish taxpayers, who have lately set an admirable example of fiscal discipline, found themselves lending E1.3