At last the tortuous process leading to agreeing a second Greek bail-out deal has ended. The main significance of the deal is that it was agreed. After all, many market participants had begun to fear that it would not be and that Greece would default. Accordingly, some were worrying about the potential consequences of a euro break-up scenario that they believed might have made the Lehman bankruptcy and its aftermath look trivial.

Of course, the deal does not solve Greece’s problems. Thus, it is widely recognised that we will probably be worrying about Greece again later. The analysis conducted by the International Monetary Fund is said to recognise the risks that the necessary competitiveness adjustment could come about via an even deeper and more protracted recession, which could imply that the debt-to-gross domestic product ratio ends up at 160 per cent of GDP in 2020, rather than the 120 per cent for which the programme is aiming. Besides, the process may be “accident-prone”. For example, it is possible that the Greek government that emerges after elections due in April will ask to renegotiate the deal.

Also, if Greece does achieve a primary surplus in the coming years, this would enhance its ability to deviate from the agreement. What does this mean for global equity and bond markets? Given the uncertainties, it is perhaps appropriate to consider scenarios.