Photo: nanagyei via flickr
Greece’s new Finance Minister, Evangelos Venizelos, just told Greek TV (via Reuters) that the country’s austerity plan will pass after changes are made to the bill.The news comes ahead of a weekend in which we could see a vote of no confidence in the current Greek government. That vote is expected to be held anytime starting Sunday night.
That no confidence vote is all about how much support Greek Prime Minister Papandreou can get for his new austerity package. If this weekend’s negotiations go well, and the package is altered to the approval of members of the Greek parliament, the no confidence vote is likely to pass without Papandreou losing his position. Further, it means Greece would have successfully sent the ball back to the EU’s court, where they will decide if the austerity package is up to par for a second bailout.
Earlier today, German leader Angela Merkel caved in terms of her demand to hit senior bondholders with haircuts. It’s likely she now knows the potential costs of a Greek collapse, and will also be willing to except a slightly modified austerity budget, if necessary, so long as it reaches pre-established IMF and EU goals.
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