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GREEK PARLIAMENT MAY REJECT EU/IMF AUSTERITY MEASURES

Historic vote on Wednesday, euro hangs by a thread

By Jane Burgermeister | June 27, 2011

*Greek Prime Minister’s  majority cut to one ahead of crucial IMF and EU austerity vote in parliament on Wednesday

*Rejection of austerity package will lead to a default by Greece and eurozone exit

*Greece is set to spend 131 billion euros on interest payments to banks between 2009 and 2014 according to IMF

*Germany’s Die Welt says Germans would rise up in rebellion if they had to accept equivalent austerity measures

*Protests and strikes intensify in Athens ahead of historical vote on Wednesday that could spell the end of the euro currency

Four Greek lawmakers from the ruling PASOK party have indicated they will vote against the new EU and IMF austerity package in parliament on Wednesday.  If the Greek parliament votes against the legislation, it would pave the way for Greece to default on its debt to foreign banks and exit the eurozone in an historic victory for democracy.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_4_26/06/2011_396030

Greece is set to pay a staggering €131bn in refinancing and interest payments to American, German and French banks between 2009 and 2014 , the IMF has estimated.

Prime Minister George Papandreou’s socialist PASOK party has a slim majority of only 155 deputies in the 300-member parliament. The defections of any more lawmakers may mean the government not be able to pass the new austerity measures and an implementation law on Wednesday and Thursday, which the EU, IMF and ECB are insisting on to enable the next interest payments to be made to banks on time.

The main opposition leader, Antonis Samaras, has said the austerity measures are a “medicine that is worse than the sickness they are meant to cure” and that he will not vote for them.

The draconian package of latest tax hikes and budget cuts include measures forcing people earning as little as 8000 euros a year to pay 10% in taxes to help the government meet the multi-billion euro interest payments to banks while universities close due to funding cuts.

“Crucially, bailout funds are not used to pay civil servants’ salaries and pensions, but to pay off debt held by German and French banks. According to IMF estimates, Greece will pay €131bn in refinancing and interest payments between 2009 and 2014, far more than the initial bailout loan of €110bn,” reports The Guardian.

The new austerity package is so harsh that if it were implemented in Germany, the people would rebell, Germany’s Die Welt newspaper admitted. The new Greek austerity measures would be the equivalent of German government cutting 117 billion euros from the budget and selling assets worth 555 billion worth of euros, estimated Die Welt.

http://www.welt.de/wirtschaft/article13451154/Wenn-Berlin-so-sparen-muesste-wie-Griechenland.html

Even the Greek Finance Minister Evangelos Venizelos said over the weekend that the measures were “hard and unfair.”

The austerity measures would drain the economy of the last of its liquidity and bust those businesses that are still solvent. Andrew Lilico points out that the Greek money supply has  been falling at about 10 per cent a year.

The new IMF, EU, ECB austerity package comes on top of cuts that resulted in shrinkage in the economy and an increase in the country’s mountain of debt. Greece’s debt is set to rise to 170% of the GDP next year.

A 48-hour general strike is to be held in Athens tomorrow and Wednesday against the privatisations and austerity package.

Protesters outside the parliament in Syntagma Square, have said that they will block lawmakers from entering the building and voting on the austerity measures.

Greek lawmakers began debating the new austerity plans today.

If Greece does not pass the package, it will not receive a 12 billion euro installment of loans from its international bailout plan to make payments to banks in the USA, Germany and France forcing it into a disorderly default.

A recommendation by German economists to introduce an insolvency mechanism for the eurozone in autumn 2010 was buried by the German government.

The threat of a disorderly default and financial disaster is being used by banks and eurozone officials to pressure the Greeks to accept the transfer of  wealth to the banks and acceopt the loss of their sovereignty.

A disorderly default would, however, pave the way for a rapid recovery of Greece’s economy outside the eurozone.

Papandreou faced down a rebellion by lawmakers this month after making a cabinet reshuffle and changing his finance minister, but the protests by people are continuing to put pressure on parliamentarians.

Even Überbankster George Soros — who has held regular private meetings with Papandreou and who called on eurozone governments and continue to loot the tax payers to save the banks in an article in the Financial Times — was forced to admit at a discussion yesterday in Vienna that the collapse of the euro currency is likely.

The euro collapse will spell the end of the bankster’s financial eurozone empire and ambitions to loot the assets and taxes of the 400 million people under the pretext of having to pay the debts of governments and banks that are actually insolvent and should have been put through insolvency mechanism long ago.

June 27, 2011 - Posted by aletho | Economics