The 2013 austerity budget has been approved by the Greek parliament paving the way for the embattled nation’s creditors to unlock the €31.5billion tranche of much needed bailout cash.
Sundays vote saw the approval of the 2013 budget which predicts that the Greek economy will contract by 6.5% this year and 4.5% next year. The vote was approved by 167 votes in favour to 128 against.
Yesterday’s successful vote now puts the pressure back onto the European finance ministers meeting due to take place later today in Brussels. The worlds market will be paying close attention to see whether the group can continue the three-year long crisis fight.
According to an EU minister last week, the ministers are expected to prevent a €5billion-Euro Greek bill redemption on November 16th and rumours abound that they will not ratify a €31.5 billion payment to Greece that has been put on hold since June. Greek Premier Antonis Samaras warned that without the bailout funds the country will run out of cash on Friday when up to €5billion of treasury bills mature.
Michael Hughes, former chief financial officer at Baring Asset Management, told the BBC: “2013 will be the sixth year that economic growth in Greece is negative, it could be falling around 5%, having fallen by 7% in 2012 and so the debt problem is actually getting worse. For the European finance ministers to actually agree to release more money they need to have some degree of guarantee that this debt problem is going to be contained at some stage.”
If they opt to not grant the next round of funds then we can expect the country to sink ever deeper into the quagmire, if the nation goes bankrupt then it is difficult to say what will happen. Civil unrest is increasingly on the rise with mass demonstrations and violent protests being held almost daily.
Ominously the far right Golden Dawn has seen a surge in popularity in recent months with the party’s membership soaring and pollsters are predicting that the group could win as much as 30% of the popular vote if snap elections were called tomorrow.
Prime Minister Antonis Samaras, leader of New Democracy, told German media last month that Greece’s woes were similar to conditions that led to the collapse of the Weimar Republic in Germany and ushered in the Nazis. Extreme leftist populism and “an extreme right, you could almost say fascist, neo-Nazi party,” were clashing in the same way that battles between communists and fascists marked the 1919 to 1933 Weimar years, he said.
European ministers may be losing patience with Greece, but if they refuse to grant the funds needed to keep the country running then we could see the rise of something truly disturbing in a nation that was the birthplace of democracy.
The Euro is approaching a two-month low against the US Dollar as European policy makers prepare to attend a two day meeting to try and resolve the ongoing problems in Greece. The regions finance ministers are meeting in Brussels this evening after Greek Prime Minister Antonis Samaras managed to gain support for the beleaguered nation’s 2013 budget.
Against the Japanese Yen the single currency has dropped to a four-week low, its longest losing streak in six weeks.
The Pound to Euro exchange rate is currently trading at 1.2511
The Pound to US Dollar exchange rate is currently trading at 1.5901
The Pound to Australian Dollar exchange rate is currently trading at 1.5230
The Pound to New Zealand Dollar exchange rate is currently trading at 1.9444
The Pound to Canadian Dollar exchange rate is currently trading at 1.5878
The Pound to Emirati Dirham exchange rate is currently trading at 5.8391
The Pound to Swiss Franc is currently trading at 1.5076
The Pound to Japanese Yen exchange rate is currently trading at 126.2700
The Euro to US Dollar exchange rate is currently trading at 1.2709
The Euro to Pound exchange rate is currently trading at 0.7994
The Euro to Australian Dollar exchange rate is currently trading at 1.2174
The Euro to New Zealand Dollar exchange rate is currently trading at 1.5544
The Euro to Canadian Dollar exchange rate is currently trading at 1.2701
The US Dollar to Pound exchange rate is currently trading at 0.6296
The US Dollar to Euro exchange rate is currently trading at 0.7858
The US Dollar to Canadian Dollar exchange rate is currently trading at 0.9995
The US Dollar to Australian Dollar exchange rate is currently trading at 0.9600
The US Dollar to New Zealand Dollar exchange rate is currently trading at 1.2246
The US Dollar to Japanese Yen exchange rate is currently trading at 79.4600
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