Tweet
From the AP:
ATHENS, Greece — Greece’s prime minister, struggling to ensure Parliamentary approval for a crucial austerity bill, said Wednesday he would reshuffle his Cabinet and seek a vote of confidence for his new government this week, after coalition talks with opposition parties failed.
George Papandreou has been struggling to contain an internal party revolt over the new austerity package that is the main condition for continued funding from an international bailout and avoiding a devastating default that would knock the global economy and undermine the future of the eurozone.
...
The emergency talks began as riot police clashed with thousands of youths in the main square outside Parliament. Police fired repeated volleys of tear gas to repel rioters hurling firebombs and ripped-up paving stones. A crowd of youths smashed the windows of a luxury hotel in the square. More than 60 people were injured, including 36 police.
...
The new austerity package, which runs two years beyond the current government’s mandate to 2015, has sparked widespread protests and a revolt from within Papandreou’s Socialist party. He saw his majority in the 300-seat Parliament reduced to five on Tuesday after one of his deputies rebelled and declared himself an independent. Another deputy has said he will not vote for the austerity package.
But the measures must be passed by Parliament before the end of the month if debt-ridden Greece is to continue receiving funding from its international bailout.
My impression is that this sucker is coming apart, and soon. The politics required to avoid a Greek default is failing at multiple points -- internally, Greece can't implement the austerity measures set as a condition for a further bailout, and externally, Germany and the ECB can't agree as to whether investors in Greek bonds will have to take haircuts. I'll go out on a limb and predict that this actually will fall apart this time. To my mind, given the current despondent atmosphere about the state of the recovery -- and the recent stock market losses -- this will likely result in further stock market declines.
Disclaimer: I'm not very good at this, and no one should trade based upon my guess as to what might happen. But I wanted to lay down a marker about what I think is going to happen.
ATHENS, Greece — Greece’s prime minister, struggling to ensure Parliamentary approval for a crucial austerity bill, said Wednesday he would reshuffle his Cabinet and seek a vote of confidence for his new government this week, after coalition talks with opposition parties failed.
George Papandreou has been struggling to contain an internal party revolt over the new austerity package that is the main condition for continued funding from an international bailout and avoiding a devastating default that would knock the global economy and undermine the future of the eurozone.
...
The emergency talks began as riot police clashed with thousands of youths in the main square outside Parliament. Police fired repeated volleys of tear gas to repel rioters hurling firebombs and ripped-up paving stones. A crowd of youths smashed the windows of a luxury hotel in the square. More than 60 people were injured, including 36 police.
...
The new austerity package, which runs two years beyond the current government’s mandate to 2015, has sparked widespread protests and a revolt from within Papandreou’s Socialist party. He saw his majority in the 300-seat Parliament reduced to five on Tuesday after one of his deputies rebelled and declared himself an independent. Another deputy has said he will not vote for the austerity package.
But the measures must be passed by Parliament before the end of the month if debt-ridden Greece is to continue receiving funding from its international bailout.
My impression is that this sucker is coming apart, and soon. The politics required to avoid a Greek default is failing at multiple points -- internally, Greece can't implement the austerity measures set as a condition for a further bailout, and externally, Germany and the ECB can't agree as to whether investors in Greek bonds will have to take haircuts. I'll go out on a limb and predict that this actually will fall apart this time. To my mind, given the current despondent atmosphere about the state of the recovery -- and the recent stock market losses -- this will likely result in further stock market declines.
Disclaimer: I'm not very good at this, and no one should trade based upon my guess as to what might happen. But I wanted to lay down a marker about what I think is going to happen.
Comment