Greek austerity package wins one vote; faces final tally tomorrow

06/29/2011 1:48 pm EST


Jim Jubak

Founder and Editor,

One vote down, one to go.

Today, June 29, Greek Prime Minister George Papandreou won the first vote on a new austerity package designed to 1) keep the cash flowing from the International Monetary Fund, the European Union, and the European Central Bank so Greece avoid a default in August, and 2) win European Union approval of a second rescue package designed to get Greece to 2013 or 2014.

Tomorrow the Greek parliament will vote again—on a legislation to implement the plan passed today.

The vote count today of 155 to 138 was a wider margin of victory than in last week’s vote of  confidence on Papandreou’s new cabinet. Papandreou succeeded in keeping his own party’s support—the governing Socialists have 155 seats in the 300-member body—and several opposition members abstained rather than going on record opposing the package.

Outside the parliament building police fired tear gas in an effort to control demonstrations and the country’s unions staged a 48-hour strike to protest budget cuts in the package.

Greek bonds rallied on financial markets with the yield on 2-year Greek government debt dropping to 26.94% from 28.54%.

European stocks also climbed with the German DAX index up 1.73% and the French CAC up 1.85%.

The euro was up 0.41% as of 1:30 New York time.


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