Greek Parliament Vote on Austerity Postponed Due to Insufficient Votes; Slovak May Reject ESFS; EU to Abandon Greece

Even politicians have had enough of Greek austerity programs as noted in Measures divide PASOK

Prime Minister George Papandreou and Finance Minister Evangelos Venizelos on Thursday began the tough task of talking round PASOK MPs who are opposed to the austerity measures announced by the government over the last few days, as the prospect of the steps being rejected by Parliament becomes a strong possibility.

The House had been due to vote Thursday on the emergency property tax, just one of several measures unveiled in recent days, but sensing a very negative mood among Socialist deputies, the government put off the ballot until Tuesday.

Sources said that at least five or six PASOK deputies said they were not prepared to support the real estate tax. Were they to carry through their threat not to vote for it, the bill would sink as PASOK only has 154 of the 300 seats in Parliament, down from 160 when the party was elected to power two years ago.

"Categorical Denial" of 50 Percent Haircut on Debt

Reuters reports Greece Sees Possibility of 50 Percent Haircut on Debt

Greece's finance minister has told lawmakers he sees three scenarios to resolve the debt crisis, including one involving an orderly default with a 50 percent haircut for bondholders, two Greek newspapers reported on Friday.

A government spokesman dismissed the reports.

Newspaper Ta Nea, citing a person who heard a speech by Finance Minister Evangelos Venizelos to ruling Socialist party lawmakers, quoted him as saying "it would be dangerous to request" the 50 percent haircut.

Two Socialist deputies who said they were present at the speech in which Venizelos tried to rally support among the ruling party for a new wave of austerity measures, denied that he had floated the 50 percent haircut scenario.

"I categorically deny it. There is no such scenario," lawmaker Theodora Tzakri told Reuters.

Slovak May Reject ESFS

Please consider Slovak parliament committees to open euro debate next week

Slovak parliamentary committees are expected to start discussion on beefing up the euro zone bailout fund next week, with the final vote seen later in October, the parliament website showed on Thursday.

The euro area's second poorest country's has become a serious risk for the plan to strengthen the European Financial Stability Facility (EFSF), as one party in the ruling coalition is adamantly rejecting to support to approve the plan.

EU to Abandon Greece

Please consider yet another "official denial", this time from the EU Economic commissioner: EU won't permit 'uncontrolled' Greek default

The European Union will not permit any disorderly default by Greece that could break down the eurozone, European Commissioner for Economic and Monetary Affairs Olli Rehn said Thursday.

"It is important to underline that the European Union is not going to abandon Greece. An uncontrolled default or exit of Greece from the euro zone would cause enormous economic and social damage," Rehn said in Washington.

Default is Imminent

Greek default is clearly hanging by threads, anyone of which could break at any time. Now that we have multiple "official denials" default is imminent.

For a discussion of "denial theory", please see Eurozone Breakup Logistics (Never Believe Anything Until It's Officially Denied)

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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