Crucial hours await the Greek Parliament this afternoon. At 13 pm Italian time, the 300 Greek deputies will meet to vote on the new austerity plan which provides for 28,4 billion in cuts between 2012 and 2015 and 50 billion in privatizations. A rejection would mean the country's bankruptcy, without the aid funds (EU and IMF) Greece would run out of liquidity within a few weeks.
At least of this the European Union and the Monetary Fund are certain, who consider these measures strictly necessary to prevent default. The newly elected president of the IMF, Christine Lagarde, reiterated, in her first statement, that the Greek people must accept and "gather around" the austerity plan.
One of the three socialist deputies who announced their vote against the maneuver has changed his mind and has now decided to support the austerity plan. Greek premier George Papandreou can count on a majority of 155 seats out of 300, but there are deputies threatening to vote against the package.
Furthermore, even if the austerity plan is approved today, there is a risk that parliamentarians could reject some more detailed rules tomorrow, which concern the application of specific elements of the plan, such as the increase in taxes or the sale of state assets. As the governor of the Central Bank of Greece, George Provopoulos, told the Financial Times, “by voting against this package, the country would be voting its own suicide.”
In Athens, new clashes broke out today in the streets between opponents and the police. The improved political prospects caused a rise in the markets and in the euro: the European stock markets opened positively. There is positive news for Italy too: the 200-year spread between the BTP and the Bund is back below XNUMX basis points. The optimism on a positive evolution of the Greek debt crisis is one of the causes that allowed to return below the threshold exceeded last Thursday.
