Greece: EU denies it has Plan B but officials say talks underway
EU denies it has Plan B but officials say talks underway
* A "no" would cause political chaos, maybe early elections
* But EU would look to tide Greece over, shore up banks
* It wants to ramp up pressure on Greek lawmakers
* Increasingly likely parliament will approve austerity
By Daniel Flynn and Renee Maltezou
ATHENS, June 28 (Reuters) - The Greek parliament appears increasingly likely to approve vital austerity steps this week, but even if it votes against them, other euro zone states are unlikely to let Athens stumble into a disorderly default on its debt.
A "no" in Wednesday's ballot on a five-year austerity programme, or in Thursday's vote on legislation to implement it, would not only cut Greece off from a vital 12 billion euro tranche of international aid but also trigger political chaos inside the country.
With the conservative opposition having rejected calls for a national unity government, Socialist Prime Minister George Papandreou would probably be forced to call early elections.
It would almost certainly take weeks to form a new government, and there would be no guarantee that a new parliament would deliver the "yes" votes that are conditions for the aid. Greece has said it needs the aid by mid-July to avoid defaulting.
The European Union's Economics and Monetary Affairs Commissioner, Olli Rehn, warned on Tuesday that there was no 'Plan B' if Greece failed to pass the laws.
But behind the scenes, EU officials say discussion has been going on for weeks to ensure that Greece gets enough money to tide it over regardless of the result of the votes. The aim is to prevent financial market instability from spreading to other weak economies -- Ireland, Portugal and Spain -- and to Europe's banking system.
"We cannot allow Greece to go into the abyss," one EU official source told Reuters.
BANKS A PRIORITY
With the governments of countries including Germany, Finland and the Netherlands frustrated by weeks of political wrangling in Athens, EU officials have been trying to convince Greek politicians this is their last chance to satisfy international donors, sources say. Hence Rehn's tough tone on Tuesday.
Some EU officials hope the tough stance could prompt Greek legislators, if they initially vote "no", to organise an emergency vote and pass the austerity steps before a meeting of euro zone finance ministers decides on Sunday whether to disburse the aid.
Failing that, the EU would seek to come up with some form of financing to keep Greece afloat until the Greek parliament could be persuaded to pass an austerity plan acceptable to the EU and the International Monetary Fund.
The sources said some options, such as an EU bridging loan for Greece, had been ruled out. One option might be bilateral loans from individual governments or other institutions, possibly outside Europe.
Chinese Premier Wen Jiabao, visiting Germany on Tuesday, repeated that his country was willing to give Europe a "helping hand" in its debt crisis. However, relying solely on Chinese aid would be politically embarrassing for Europe.
The EU is also discussing plans to recapitalise banks to insulate them against the impact of a potential Greek default, based on the results of a second, stricter round of stress tests of the health of European banks. The results of the tests are due in mid-July.
It is conceivable that even without aid, Greece could roll over some 4.4 billion euros of three- and six-month Treasury bills due to mature on July 15 and 22, but it is expected to be unable without aid to redeem 5.9 billion euros of five-year bonds it has falling due on Aug. 20.
"The financial experts, the central bankers, the ECB (European Central Bank) people have to work out their scenarios for practically all variations of economic life, but we politicians do well to encourage the Greeks to do what they have to do," Austrian Chancellor Werner Faymann said on Tuesday.
INCREASING OPTIMISM
There are some signs that the EU's tough talks is working. Greece's centre-right newspaper Kathimerini warned politicians against testing the nerve of the country's European partners.
"No one can be this irresponsible, accepting to toy with the scenario of the country's uncontrolled bankruptcy," it said.
While Greek protestors clashed with police in Syntagma square outside parliament on Tuesday, optimism was growing that within the 300-seat chamber, Papandreou would achieve the 151 votes he needs to approve each of the laws.
Three members of his PASOK party, which has a slender majority with 155 seats, had appeared to waver in recent days. But even members of the conservative New Democracy opposition party told Reuters on Tuesday they expected the laws to pass.
"The government is going to pass the vote quite easily, probably not just with the votes of all of the PASOK legislators, but also with some of the opposition," said Costas Panagopoulos of pollster ALCO.
"It's going to be much easier than it appeared a couple of days ago."
New Democracy leader Antonis Samaras has insisted that if the measures are not approved, Greece should go back to the EU and IMF to renegotiate new terms -- which could take months.
To win over party doubters, new Finance Minister Evangelos Venizelos, appointed in a reshuffle this month, promised to reopen talks on unpopular tax increases, once the payment of the 12 billion euro loan tranche has secured funding until September. That appeared to be enough to appease some critics in his party.
"We will make a move to save the country, while recognising that the measures are problematic and unfair, in order to gain time and solve the problem," said Odysseas Constantinopoulos, a PASOK deputy who has strongly criticised the austerity package.
"European citizens should recognise and support our efforts. We want to live together, as a family." (Additional reporting by Luke Baker and Julian Toyer in Brussels, Edward Taylor in Frankfurt and Michael Shields in Vienna; Writing by Daniel Flynn; Editing by Andrew Torchia)
* A "no" would cause political chaos, maybe early elections
* But EU would look to tide Greece over, shore up banks
* It wants to ramp up pressure on Greek lawmakers
* Increasingly likely parliament will approve austerity
By Daniel Flynn and Renee Maltezou
ATHENS, June 28 (Reuters) - The Greek parliament appears increasingly likely to approve vital austerity steps this week, but even if it votes against them, other euro zone states are unlikely to let Athens stumble into a disorderly default on its debt.
A "no" in Wednesday's ballot on a five-year austerity programme, or in Thursday's vote on legislation to implement it, would not only cut Greece off from a vital 12 billion euro tranche of international aid but also trigger political chaos inside the country.
With the conservative opposition having rejected calls for a national unity government, Socialist Prime Minister George Papandreou would probably be forced to call early elections.
It would almost certainly take weeks to form a new government, and there would be no guarantee that a new parliament would deliver the "yes" votes that are conditions for the aid. Greece has said it needs the aid by mid-July to avoid defaulting.
The European Union's Economics and Monetary Affairs Commissioner, Olli Rehn, warned on Tuesday that there was no 'Plan B' if Greece failed to pass the laws.
But behind the scenes, EU officials say discussion has been going on for weeks to ensure that Greece gets enough money to tide it over regardless of the result of the votes. The aim is to prevent financial market instability from spreading to other weak economies -- Ireland, Portugal and Spain -- and to Europe's banking system.
"We cannot allow Greece to go into the abyss," one EU official source told Reuters.
BANKS A PRIORITY
With the governments of countries including Germany, Finland and the Netherlands frustrated by weeks of political wrangling in Athens, EU officials have been trying to convince Greek politicians this is their last chance to satisfy international donors, sources say. Hence Rehn's tough tone on Tuesday.
Some EU officials hope the tough stance could prompt Greek legislators, if they initially vote "no", to organise an emergency vote and pass the austerity steps before a meeting of euro zone finance ministers decides on Sunday whether to disburse the aid.
Failing that, the EU would seek to come up with some form of financing to keep Greece afloat until the Greek parliament could be persuaded to pass an austerity plan acceptable to the EU and the International Monetary Fund.
The sources said some options, such as an EU bridging loan for Greece, had been ruled out. One option might be bilateral loans from individual governments or other institutions, possibly outside Europe.
Chinese Premier Wen Jiabao, visiting Germany on Tuesday, repeated that his country was willing to give Europe a "helping hand" in its debt crisis. However, relying solely on Chinese aid would be politically embarrassing for Europe.
The EU is also discussing plans to recapitalise banks to insulate them against the impact of a potential Greek default, based on the results of a second, stricter round of stress tests of the health of European banks. The results of the tests are due in mid-July.
It is conceivable that even without aid, Greece could roll over some 4.4 billion euros of three- and six-month Treasury bills due to mature on July 15 and 22, but it is expected to be unable without aid to redeem 5.9 billion euros of five-year bonds it has falling due on Aug. 20.
"The financial experts, the central bankers, the ECB (European Central Bank) people have to work out their scenarios for practically all variations of economic life, but we politicians do well to encourage the Greeks to do what they have to do," Austrian Chancellor Werner Faymann said on Tuesday.
INCREASING OPTIMISM
There are some signs that the EU's tough talks is working. Greece's centre-right newspaper Kathimerini warned politicians against testing the nerve of the country's European partners.
"No one can be this irresponsible, accepting to toy with the scenario of the country's uncontrolled bankruptcy," it said.
While Greek protestors clashed with police in Syntagma square outside parliament on Tuesday, optimism was growing that within the 300-seat chamber, Papandreou would achieve the 151 votes he needs to approve each of the laws.
Three members of his PASOK party, which has a slender majority with 155 seats, had appeared to waver in recent days. But even members of the conservative New Democracy opposition party told Reuters on Tuesday they expected the laws to pass.
"The government is going to pass the vote quite easily, probably not just with the votes of all of the PASOK legislators, but also with some of the opposition," said Costas Panagopoulos of pollster ALCO.
"It's going to be much easier than it appeared a couple of days ago."
New Democracy leader Antonis Samaras has insisted that if the measures are not approved, Greece should go back to the EU and IMF to renegotiate new terms -- which could take months.
To win over party doubters, new Finance Minister Evangelos Venizelos, appointed in a reshuffle this month, promised to reopen talks on unpopular tax increases, once the payment of the 12 billion euro loan tranche has secured funding until September. That appeared to be enough to appease some critics in his party.
"We will make a move to save the country, while recognising that the measures are problematic and unfair, in order to gain time and solve the problem," said Odysseas Constantinopoulos, a PASOK deputy who has strongly criticised the austerity package.
"European citizens should recognise and support our efforts. We want to live together, as a family." (Additional reporting by Luke Baker and Julian Toyer in Brussels, Edward Taylor in Frankfurt and Michael Shields in Vienna; Writing by Daniel Flynn; Editing by Andrew Torchia)
Comment
"Destroying the New World Order"
THANK YOU FOR SUPPORTING THE SITE!
Latest Activity
- Top News
- Everything
"Les prone, Thanks Buddy! "
"Less Prone as usual the official version of the truth does not match the evidence and is labeled…"
"Charlie Kirk was getting very critical against Israel and had turned down a lucrative deal from the…"
The Army of Government Launched Psychopaths
They walk among us in most college towns. They seem relatively reasonable until political…See More
"Have to sign in to YT for this. So. What I do is to go to https://ytdown.io/en/ and download…"
"cheeki kea, you are spot on. The old guard is about to collapse! "
"cheeki kea, the Japanese thought they could expand their empire and exact enough damage on the US…"
NEW DOCUMENTARY - Dissent Into Madness
TRANSCRIPT AND SOURCES: https://www.corbettreport.com/dissent-into-madness/What if the delusions of the dissidents are in fact real? What if their paranoid f...
"Japan served themselves up no favours by inching out into the South Pacific as they soon found out.…"
"Their plans did not work out because we are the news now, and the old news is the enemy. "
Alligator Creek and a Japanese Massacre
The year is 1942 just a few months after the Pearl Harbor disaster. Despite losses suffered by the…See More
CHARLIE KIRK WAS CNP! JOSH REEVES 9-11-25
"With all due respect this guy comes off as a drunken asshole and he didn't even know who…"
© 2025 Created by truth.
Powered by
You need to be a member of 12160 Social Network to add comments!
Join 12160 Social Network