ATHENS/PARIS. Thursday, June 30, 2011 6: 00 pm EDT
Athens/PARIS (AFP) - the Greek Parliament was created to approve austerity and bills of privatization Thursday to get emergency funds and to avoid imminent bankruptcy, but the long-term dangers lurk again.
The euro and global stocks rose after first voting Wednesday to adopt a five-year plan of austerity despite fierce public opposition pay more and cuts budget, investors expressed relief that the immediate implosion was averted.
Belgian Finance Minister Didier Reynders said, as a result, euro-zone finance ministers were likely to agree to release a next tranche of loans to the Greece at a meeting Sunday.
This loan of EUR 12 billion will prevent the default Greece mid-July or no later than August 20, when it must honour a redemption of leap and move the focus to a second package of assistance that could be on the same size that the EUR 110 billion bailout last year.
But the credit insurance markets are still pricing in 40 per cent for the holders of bonds on three-year debt likely chance of 80 per cent of the Greece by default on its mountain of debt of 340 billion euros--150% of economic output annual - in five years and a devaluation.
Socialist Government of Prime Minister George Papandreou may find it difficult to meet increases in taxes and sales of State assets against resistance mass public, while still violent fringe in Greek political life has erupted in the foreground.
The rioters armed with stones and clubs fought several hours of battles with police shooting running huge clouds of tear gas at the Centre of Athens into the early hours of the morning, leaving a field of debris from street cleaners remove.
"The law of implementation will be without problems," said Costas Panagopoulos, head of pollsters ALCO.
"The problem for Papandreou is not in the Parliament, it is what is happening outside of Parliament: not implemented Syntagma, which is a few hundred demonstrators, but with all of the Greece 11 million people."
FLIPPING TALKS
Of creditor European countries of the North, led by Chief Treasurer in Germany, insisting that the holders of private sector must share the cost of any other rescue, to intensive talks are underway on a "voluntary" Greek debt rollover due to expire.
German banks were due to discuss a plan of French capital that has attracted widespread with the officials of the Ministry of finance Thursday, but differences remain on incentives for private investors and ensures the possible official.
President of European Central Bank, Jean-Claude Trichet, who has repeatedly warned the EU against the outbreak of a credit event or the decommissioning of the devastating Greek debt, gave a cautious response to the French proposal in testimony to the European Parliament.
"At this stage, we have not yet (has obtained a position...), we are very alert but I can't give you a precise judgment on what is happening." There are several concepts when asked, "he says. "We advise against all concepts that are not purely voluntary."
Three banking sources told Reuters Wednesday that politicians and bankers were convinced that the implementation of the French plan would not trigger a payment of credit insurance or a defect that would inflict losses on the banks.
The banks had received positive signals from the rating agencies that they would not undermine the plan turning by default, the sources said.
But officials warned that many details of the plan, especially if there is no official warranty remaining to negotiate.
"We had a lot of discussions at the technical level to see what are the best solutions," Reynders said, adding that a decision could be taken by European Ministers of finance meeting on July 11 and 12.
"RISK OF IMPLEMENTATION".
As Athens recovered from a night of violence, market concerns displaced against the risk of a lack of immediate disorder for the first time in the eurozone at the prospect of medium term of a debt restructuring Greek.
"There are still risks of implementation in the coming months, but for the moment, the risk of default was taken off the coast of the table as long as through today's vote, said strategist of the Bank Lloyds Eric Wand."
It provides renewed pressure on the obligations of the weakest countries in the euro area on the edge of the area of the single currency after a short respite.
"There should be a brief interruption in the periphery-bashing we've had over the past few weeks, but other problems".
Those included the perspective of the early Spanish elections and bickering in the coalition of center-right of the Italy, while the country faces a downgrade rating of credit.
Office of the Italy is due to adopt Thursday a plan more ambitious deficit reduction than expected initially intended to save EUR 47 billion by 2014 to try to deal with a loss of solvency.
But the partners of the coalition of Prime Minister Silvio Berlusconi Northern League said that the Government is at risk on planes to the retirement age and reduce spending.
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