Photo: Wikimedia Commons
Other than the cabinet shuffle in Greece — which saw a replacement of the country’s FinMin — the news has suddenly gone quiet.Merkel and Sarkozy just gave some comments about voluntary haircuts, which is a bit of a backdown from a previous stance, where they insisted that banks must agree to get clipped in a bailout.
Still the big questions in Greece are internal, and the big developments will probably take place this weekend, in what could potentially make good parallel to the infamous “Lehman weekend.”
SocGen (via ZeroHedge) has some good commentary on this:
The vote: The odds are tight
Prime Minister George Papandreou stated that he would reshuffle his cabinet on Thursday, and demand a confidence vote in Parliament. Taking into account the three days usually required for this process, the actual voting is unlikely to take place until Sunday June 19. There is a lot at stake with this vote. A successful outcome would throw the ball back into the EU’s court, and allow the EU/IMF policymakers to proceed with devising a medium-term funding solution for Greece.
But political risks remain extremely high. PM George Papandreou’s majority is extremely narrow after two further defections on Thursday. The margin of victory may boil down to one or two votes, making the outcome virtually unpredictable at the time of writing.
In the meantime, the respite from negative developments has given everyone a moment to breathe. Markets are rallying. Europe has gone green, as have US futures.
PS: If you haven’t read it yet, see Jim Reid’s commentary on Greece and its similarity to Lehman.
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