One Greek hurdle down, but more ahead | FT Alphaville

One Greek hurdle down, but more ahead

A tense Sunday in Athens as the Greek parliament approved an austerity budget amid violence in the streets that included riot police firing tear gas and stun grenades at protesters while buildings throughout the city were firebombed:

The legislation passed by 199 votes in favour to 74 against, a convincing majority for Lucas Papademos, the caretaker prime minister who has been given the job of pushing through painful reforms demanded by the European Union and the International Monetary Fund in return for a second €130bn bail-out. …

Now the package has been approved, the leaders of Greece’s two main parties, the PanHellenic Socialist Movement and conservative New Democracy party, have to make a written commitment to implement the programme fully, regardless of who wins a snap general election expected in April.

That’s the latest update from the FT, emphasis ours.

And according to the Wall Street Journal, 43 deputies from the socialist party Pasok and conservative party New Democracy, whose leader Antonis Samaras is expected to be the next prime minister, were expelled for not voting in favour.

Also from the WSJ — here’s something we suspect that this won’t be viewed favourably by the EU and IMF:

But in a sign of the intense public pressure facing Greek politicians, Antonis Samaras, leader of New Democracy and likely the next prime minister, said the measures should be renegotiated after national elections expected in April. …

Euro-zone finance ministers will meet on Wednesday in Brussels to sign off on the deal. Their expected approval will trigger an offer to private-sector holders of Greek government bonds, who will be asked to exchange their existing bonds for new bonds with half the face value.

The Euro rallied slightly on news of the vote, but as Reuters reported earlier in the day, there is much work left to be done:

There are more immediate hurdles as euro zone finance ministers, who are expected to meet later in the week to sign off on the deal, have told Athens it must also explain 325 million euros ($430 million) out of this year’s total budget cuts will be achieved before the bailout is agreed.

Highlighting the exasperation on the side of paymaster, German Finance Minister Wolfgang Schaeuble said in an interview with German newspaper Welt am Sonntag that Greek promises on austerity measures are no longer good enough because so many vows have been broken and the country has to dramatically change its ways.

Related links:
Wolfgang Munchau: Why Greece and Portugal ought to go bankrupt – FT
The killing of Greece – Macrobusiness
Schauble on the euro crisis (in German) – Welt am Sonntag
Venizelos, uncut – FT Alphaville