1. Charts and Tables from “An Attempt to Think Through the Greek Crisis,” GaveKal A Look at Euro Zone Sovereign Debt Markets

2. Budgetary Constraints from EMU’s “Stability and Growth Pact” Broadly, each country in the EMU limits public debt and the deficit. What is the difference in debt and deficits? Limits Debt limit, 60% of GDP Deficit, 3% of GDP, (except when the excess deficit is due solely to an economic recession) Remember these 2 benchmarks to use in looking at other countries and the U.S.

3. What would you expect to happen as countries have larger deviations from the stated limits? The fiscal policies in the future must be more “austere” – less stimulative There is likely to be more chance of default in such countries.

4. Sovereign Spreads in Euro Zone

5. Euro Zone Public Debt to GDP and Effort to bring deficit back to 3% GDP by 2012

6. Euro Zone Public Finance Information (source: GaveKal)