Greek Parliament approves Austerity process; Greek concern eases

Thu, Jun 30 2011, 16:25 GMT
by Mauricio Carrillo

The Yorgos Papandreu's government has won the second crucial voting in two days as the Greek parliament passed the second austerity bill, focused on technical and processing aspects, today by 155 votes to 136. It means that Greece is now eligible to receive the fifth tranche of the bailout funds from the EU and IMF which will help the country avoid default. Market has received the news as fresh air and euphoria since the Greek concern seems to have finally eased.

The "positive resolution" has continued today with the approval of the 5-year austerity implementation process while protesters continued taking the streets against the unpopular plan.

On July 3, Eurozone finance ministers will be ready to discuss the details of a second more long-term, comprehensive support package for Greece at an extraordinary meeting. They will also give the green light to the €12bn tranche of aid due under the initial bailout. Greek government officials have said they are going to be running out of money past mid-July to pay wages and pensions unless the next tranche of funds is provided.

The IMF board is expected to have a meeting on July 8 to approve the disbursement of its tranche. Next, talks about a second longer-term bailout package are planned to be retaken on July 11 when the IFM, Greek government and the Euro leaders will speak about the fully covering of financing needs up to 2014.

The Euro continues rising against the Dollar after Greece concern eases

The Euro has climbed above 1.4500 level against the Dollar after the Greek Parliament positive decision. Currently the EUR/USD is trading around 1.4520.

After rejecting the 1.4520 level in a first attempt this morning and falling to set a daily bottom at 1.4450, the pair began to trade sideways just at the American opening bell to accelerate in the upside after the Greek approval. "This is why I was dubious about pressing shorts today," comments in his Twitter Boris Schlossberg, Currency Adviser at BK Forex. "$EUR/USD 1.4500 taken out, 1.4550 in view," Boris affirmed.