European debt crisis - what is the Troika?

Yesterday in the markets was a massive up day, or "Risk On" as many players that have been shorting the equity markets, took profits ahead of possible European announcements that something concrete is happening to solve the current European debt crisis.

The Footsie gained close to 5%, gains that were mirrored around the world, especially in financial stocks that have been hit hard by the prospect of Greece defaulting on it's debts, still a very real possibility.

Greece is very much centre stage and what is popularly know as the Troika, (representatives of the IMF, European Central Bank and European Union) arrives in Greece today, to work out exactly how the country can meet the budgetary cuts necessary to trigger further bailout funds, against a backdrop of unrest and strike action by the Greek people.

This team is about as heavyweight as it gets.

There is a feeling that any package will come with a 50%" haircut" or in simplistic term, a loss for bondolders currently lending to Greece, of 50% of the loan amount, or more, depending on the eventual agreement thrashed out, that needs to do so in a manner that doesn't lead to contagion. The last thing markets need is the Troika tour bus having to head for Italy in a month or so.

Global markets need to know that the European leaders have the ability to solve problems a lot quicker than they are now and until that happen, markets will remain highly volatile with a bias to the downside.