Germans prefer the austerity of tax cuts: survey (AFP)

BERLIN (AFP) - an overwhelming majority of Germans would prefer to see more austerity to reduce the debt instead of tax cuts promised by the Government, according to a survey published Friday.

Requested A "do you think it is more important to cut taxes or reduce new public debt?", 70% of respondents say that they preferred austerity compared with 24%, opt for tax cuts, in a poll by the Infratest-Dimap independent research firm opinion.

The survey reveals deep scepticism on the promise of Chancellor Angela Merkel to reduce the tax of an amount not specified in 2013, the year of the next scheduled general election and the general malaise may be over the eurozone debt crisis.

Forty - nine percent said that plans were not based on the State of German public finances, with 48% in support of tax relief.

Only a minority--36 percent - said they were convinced that tax cuts would be effectively implemented over the next two years while 62% said that they do not believe the promise of the Government.

Even if the tax cuts are approved, only two per cent thought that they would provide "significant relief" for their own household, against 52% thought that they would be "light relief" and 45 percent, which provided "no remedy".

In Germany, the largest contributor of bailouts of debt in the eurozone as its economy at the top of the page, on Wednesday forecast an unexpectedly strong reduced its public deficit in a draft budget for 2012 with solid economic growth.

Falling unemployment reduced payroll, and the national deficit should fall to 27.2 billion euros ($38.9 billion) from the previous estimate of EUR 31.5 billion.

The German deficit will wheelie by more than 17 billion euros in two years to a peak in 2010 resulting in large part of the rescue plans necessary to overcome the economic crisis.

But despite the booming economy and finance public relatively in good health, the Merkel Government sank in the polls because of quarrels internal coalition and the perception that the Chancellor has failed to carry out a clear on issues ranging from energy policy of the euro-zone debt crisis.

The Infratest dimap survey, 1,005 people Monday and Tuesday, with a 1.4 to 3.1% error margin, showed coalition under Merkel failing to win a majority with only 37% of support.

A potential alliance of the opposition of Social Democrats and Greens would win 49 percent of the vote, the survey.

Greek Parliament should endorse the austerity second Bill (Reuters)

Athens (Reuters) - the Greece Parliament should pass a second Bill of austerity Thursday to allow the country to avoid bankruptcy by getting a slice of loan of 12 billion euros ($17 billion) of the EU and the IMF.

After two days of violent demonstrations just metres (yards) from where members adopted an initial act of austerity on Wednesday, they began to discuss detailed measures to implement EUR 28 billion in spending cuts, increases and privatization.

Dangerously close Greece to the default value that would trigger chaos on the financial markets, the European Union and the Monetary Fund International demanded that the two bills of austerity transmitted before it releases the next batch of bailout EUR 110 billion agreed last year.

In a hand for Socialist Prime Minister George Papandreou, the conservative opposition said it is willing to support measures in the second vote after having opposed the first invoice of austerity.

"We will do our utmost to support the Government," said the legislator of the new democracy Nikos Dendias, a former justice Minister. "We will vote for two chapters of the Bill today."

Parliament resumed debate at 9: 30 am (0630 GMT) and the decisive vote was not expected to begin before 2 pm (1100 GMT) with results emerging some time in the afternoon.

Voting will be by roll-call, with members called to vote on both the general principle of the Bill and of the individual articles. Papandreou has called a meeting of the Council of Ministers after the vote.

While the Socialist lawmakers are expected to back the legislation as a whole, some said that they opposed individual clauses, such as increases in a levy on heating oil and an increase of the minimum income tax threshold.

In an effort to convince the undecided, new Minister of finance Evangelos Venizelos offered some concessions on tax increase as threshold exempt from tax for families with children.

The first austerity Act, which describes the hard program cuts and selloffs, passed by 155 votes to 138. Approval of the second would allow euro-zone finance ministers delete the release of EUR 12 billion at a meeting Sunday.

Approval by the IMF is expected on July 5, averting the immediate threat of failure.

After that, attention will switch to a second rescue plan, roughly equivalent to the EUR 110 billion rescue plan agreed in May 2010, including the Greece needs to continue until 2014.

UPCOMING ISSUES

Global stocks rallied Thursday for the third consecutive day and the euro reached its highest level of the dollar in 20 days on a sense of relief that looked like Greece to avoid the first bankruptcy of debt in the euro area.

Calm returned Thursday two days of violent protests that have blocked the city centre and the Centre of Athens, who was paralyzed during a strike for 48 hours from the ground by the powerful labor unions sectors public and private.

Teams of street cleaners swept broken masonry and broken glass after a night of clashes in the vicinity of square Syntagma right in front of the Parliament.

But protest banners and tents remained in place Syntagma, where demonstrators camped during more than a month show their anger at austerity measures at the wheel of many Greeks to despair in the worst recession since the 1970s.

"The implementation Act will pass, 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."

With the ordinary Greeks to years of standard of living fall as the Government struggles to slash a mountain of debts amounting to more than 150% of the gross domestic product, transforming action laws will be a major challenge.

Unions and promised to oppose privatization promised de s' de s' à des à des à des syndicats et promis de s' opposer à des privatisations ont promis de s' à des de s' à des privatisations opposer promis opposer ont de s' de s' de s' à des privatisations à des privatisations opposer opposer opposer à des privatisations opposer promis opposer promised opposer ont de s' à des privatisations opposer promis opposer ont. The Socialists, which interrupted the process of privatization of the Greece when they came to power, must sell 5 billion euros in assets this year or risk missing the targets within the framework of its EU agenda and the IMF, which would have cut funding once more.

"If Papandreou and Venizelos miss this last chance, and not to pursue the necessary reforms and a true skin of grief in the State of waste, they and the country will be an explosive situation in the fall at no way out"centre-right daily Kathimerini wrote in an editorial."."

(Additional by Harry Papachristou and George Georgiopoulos, written by James Mackenzie; editing by Mark Heinrich)

Greek Parliament should endorse the second Bill of austerity

Overview of the Greek as Parliament Prime Minister George Papandreou spoke (C) Athens, June 29, 2011.

Credit: Reuters/Giannis Liakos/ICONBy Dina Kyriakidou and Renee Maltezou

ATHENS | Thursday, June 30, 2011 6 pm EDT

Athens (Reuters) - the Greece Parliament should pass a second Bill of austerity Thursday to allow the country to avoid bankruptcy by getting a slice of loan of 12 billion euros ($17 billion) of the EU and the IMF.

After two days of violent demonstrations just metres (yards) from where members adopted an initial act of austerity on Wednesday, they began to discuss detailed measures to implement EUR 28 billion in spending cuts, increases and privatization.

Dangerously close Greece to the default value that would trigger chaos on the financial markets, the European Union and the Monetary Fund International demanded that the two bills of austerity transmitted before it releases the next batch of bailout EUR 110 billion agreed last year.

In a hand for Socialist Prime Minister George Papandreou, the conservative opposition said it is willing to support measures in the second vote after having opposed the first invoice of austerity.

"We will do our utmost to support the Government," said the legislator of the new democracy Nikos Dendias, a former justice Minister. "We will vote for two chapters of the Bill today."

Parliament resumed debate at 9: 30 am (0630 GMT) and the decisive vote was not expected to begin before 2 pm (1100 GMT) with results emerging some time in the afternoon.

Voting will be by roll-call, with members called to vote on both the general principle of the Bill and of the individual articles. Papandreou has called a meeting of the Council of Ministers after the vote.

While the Socialist lawmakers are expected to back the legislation as a whole, some said that they opposed individual clauses, such as increases in a levy on heating oil and an increase of the minimum income tax threshold.

In an effort to convince the undecided, new Minister of finance Evangelos Venizelos offered some concessions on tax increase as threshold exempt from tax for families with children.

The first austerity Act, which describes the hard program cuts and selloffs, passed by 155 votes to 138. Approval of the second would allow euro-zone finance ministers delete the release of EUR 12 billion at a meeting Sunday.

Approval by the IMF is expected on July 5, averting the immediate threat of failure.

After that, attention will switch to a second rescue plan, roughly equivalent to the EUR 110 billion rescue plan agreed in May 2010, including the Greece needs to continue until 2014.

UPCOMING ISSUES

Global stocks rallied Thursday for the third consecutive day and the euro reached its highest level of the dollar in 20 days on a sense of relief that looked like Greece to avoid the first bankruptcy of debt in the euro area.

Calm returned Thursday two days of violent protests that have blocked the city centre and the Centre of Athens, who was paralyzed during a strike for 48 hours from the ground by the powerful labor unions sectors public and private.

Teams of street cleaners swept broken masonry and broken glass after a night of clashes in the vicinity of square Syntagma right in front of the Parliament.

But protest banners and tents remained in place Syntagma, where demonstrators camped during more than a month show their anger at austerity measures at the wheel of many Greeks to despair in the worst recession since the 1970s.

"The implementation Act will pass, 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."

With the ordinary Greeks to years of standard of living fall as the Government struggles to slash a mountain of debts amounting to more than 150% of the gross domestic product, transforming action laws will be a major challenge.

Trade unions have promised to oppose privatization and other austerity measures. The Socialists, which interrupted the process of privatization of the Greece when they came to power, must sell 5 billion euros in assets this year or risk missing the targets within the framework of its EU agenda and the IMF, which would have cut funding once more.

"If Papandreou and Venizelos miss this last chance, and not to pursue the necessary reforms and a true skin of grief in the State of waste, they and the country will be an explosive situation in the fall at no way out"centre-right daily Kathimerini wrote in an editorial."."

(Additional by Harry Papachristou and George Georgiopoulos, written by James Mackenzie; editing by Mark Heinrich)

Portugal shows zeal of austerity, refer to high-speed rail (AFP)

Lisbon (AFP) - the new centre-right of the Portugal Government promised Tuesday to go beyond the objectives of austerity agreed in its EU - IMF rescue plan, sacrificing the completion of a high speed train linking with the Spain.

Suspend the construction of the rail link Lisbon-Madrid high speed that was scheduled to be completed by 2013, as part of a four year program Government submitted to Parliament for approval.

The Portuguese Prime Minister Pedro Passos Coelho promised Government of "scrupulously apply the measures negotiated with the Monetary Fund International and the European Union," but said he wants to be "more ambitious in the process of adjustment to the Portuguese economy.

This was to "guard against external and internal potential," said a Government document detailing the plan.

Bailout Lisbon, Portugal ($112 billion) of EUR 78 billion to implement stringent financial control measures, to introduce reforms and sell property of the State to improve the weak structure of the economy.

The country must press its public deficit of 9.1% of the domestic product gross year last three percent in 2013.

There were growing concerns that a Greek default could spread a new wave of contagion throughout the euro area, further damage weaker economies such as the Portugal.

"Complementary measures of a structural nature" will be adopted if necessary "to ensure respect and achievement targets early which is linked to the country and restore international confidence in its economy, also" promised in the Government.

The Government program, due to be debated by legislators, on Thursday and Friday, announced it would "suspend" construction of the high-speed rail project.

This could be revisited at a later stage, for a possible renegotiation of the contract, the document said.

The contract for the first section of the line of Madrid was signed in May 2010, while the process of tendering for a second section was never completed.

The project was to reduce the travel time between the two capitals within three hours and bind the Portugal to the railway network at high speed in Europe, at a cost of EUR 3.3 billion to Lisbon.

The Minister of transport of the Spain, Madrid, Jose Blanco, said that if the suspension is approved, it would be "a bad decision" while adding that he also wanted clarification if it would be a temporary or permanent stay in the project.

The rail link was a flagship project of former Socialist Prime Minister José Socrates, but the centre-right long called for him to be delayed to reduce the debt of the country, reaching 93% of GDP in the last year.

The new Government also pledged to reconsider the construction of a new airport for Lisbon, which was to be completed by 2017.

It is committed to expanding the privatization of media held the State to include the sale of a string of television, radio and press agency Lusa.

The Government also promised reforms of the labour market to eliminate all fixed-term employment contracts by simplifying the regulations for employers to put an end to new recruits.

It is committed to implement existing laws and to create an independent authority to monitor expenditures.

Oil climbing 2.5 pct before Greek austerity vote (AP)

NEW YORK - oil climbed to more than 2% Tuesday ahead of a vote in Greece to approve difficult new financial reforms which would consolidate its economy at Bay.

Reference West Texas Intermediate acquired $2.28, or 2.5%, to settle at $92.89 per barrel Tuesday on the New York Mercantile Exchange. In London, gross Brent added $2.79 or 2.6%, to settle at $108.78 per barrel on the ICE Futures Exchange.

On its own financial problems of the Greece would not normally move global oil prices. But analysts say that if the country fails to pay its bills, his problems could spread to neighboring countries and undermine the economy of the European Union.

Reinforced of the euro against the dollar and led like oil. Oil, whose price is U.S. currency tends to increase as the dollar weakens and makes the barrels of crude cheaper for investors holding foreign funds.

Greek legislators will vote Wednesday and Thursday on a $ 40 billion austerity plan. Riots broke out in Athens Tuesday as spicy legislators new taxes, spending cuts and other reforms. The austerity plan is required for the country to receive money from rescue of the European Union and the Monetary Fund International.

Oil rose despite the weak another reading on consumer confidence in the United States, the largest consumer of oil in the world. A private research group said the consumer confidence slipped to a minimum of seven months on worries of work increased.

MasterCard SpendingPulse reported in its weekly survey that consumers purchased an average of 390.3 million litres of gas per day in the four weeks ending June 24, down 0.2 percent from the same period last year. It was the 14th consecutive decline for the average of four weeks in the MasterCard survey, based on credit card purchases.

During this time, the United States retail gasoline is passed to an average national $3.551 per gallon. A gallon of unleaded is less expensive that it was the last month, but it is always higher than the same period last year 79.5 23.9 cents cents.

In the other trade Nymex contracts in July, oil heating added 6.01 cents to settle at $2.8415 per gallon and future gasoline added 7.12 cents to settle at $2.8156 per gallon. Natural gas increased by 10.1 cents to settle at $4.357 per 1,000 cubic feet.

Stocks advance on the Greek austerity vote hopes (AP)

LONDON - world stocks pushed more Tuesday as investors grew hopeful that Greek lawmakers will pass a vote on another round of austerity measures should stop any imminent conversation the country default on its debts.

The majority of 300 deputies have to approve the austerity euro28 billion ($40 billion) project in a vote Wednesday. If Parliament gives its support to the budgetary and tax increases, then the Greece be able to get his next batch of rescue - a value of euro12 billion Fund - to rescue the European billion last year.

Without the funds of the rescue plan, the country would be cash in the middle of July. This type of failure would hit banks everywhere in Europe and could potentially destabilize the markets.

The measures, however, are are unpopular and Greek unions were striking Tuesday hoping to put pressure on legislators to vote against the package. Tuesday, riot police battled protesters hurling bombs of fire, as lowered thousands in the street in protest at the austerity Bill.

"Despite the general strike from today, there still appears to be an optimistic tone that austerity measures will be passed tomorrow and the rescue plan may proceed to the next step,", said David Jones, Chief Strategist at IG Index market. "There is still much that could go, but the way in which markets have performed over the last two days, some hope that finally sentiment took a turn and it is time to recovery."

In Europe, the FTSE 100 index leading British shares closed up to 0.8% 100 to 5,766.88 then that CAC-40 the France increased from 1.5% to 3,851.89. Germany DAX ended 0.9 percent higher at 7,170.43.

In United States, pink stocks, helped by new fairly positive dwellings. Real estate prices have increased in April in 13 of the 20 cities s/Case-Shiller index Standard & Poor. The index hit Records lows in March.

The Dow Jones industrial average was 0.9 per cent to 12,149, then as the future Standard & Poor of 500 more wide increased from 0.8% to 1290.

Expectations that passes the Greek austerity package has helped to consolidate the euro over the last few sessions, but if the measures fail, and analysts believe the euro could face some heavy selling.

"A positive outcome to the vote tomorrow in the Greek Parliament is largely to be expected and should provide only a moderate euro impulse," said Vasily Serebriakov, the Wells Fargo Bank currency strategist. "In contrast, the currency could face significant disadvantage in the scenario less likely measures did not pass."

By times of London from late afternoon Tuesday, it was 0.3 per cent to $1.4363.

Even if the Greece Gets the next batch of rescue funds, many economists believe that the country will have to restructure its debt euro340 billion mountain sometime in the years to come. Some believe that it is possible, that it may arrive even earlier.

"The real problem, however, is that the Greece is ever more unlikely to hit the targets of renewed austerity which means we may be not further forward to the next review of the IMF program in September," said James Nixon, Co-Chief European Economist at Societe Generale.

Earlier in Asia, Japanese Nikkei 225 climbed to 0.7 per cent to close at 9,648.98, but shares of Nestle South Korea fell by 0.4% to 2,062.91. Hong Kong Hang Seng gained 0.3 percent to 22,114.23. S & P/ASX 200 closed Australia 0.3 percent higher to 4,474.30.

Actions ?? Chinese roses, too, with the edge of Shanghai Composite index less than 0.1 per cent higher at 2,759.20, while the Shenzhen Composite index has gained 0.3 percent to 1,152.00.

The retrieved oil prices lost some ground following the decision of the week last by the International Energy Agency to release 60 million barrels of crude oil in 30 days. Oil from reference for August delivery was up to $1.16 to $90 US per barrel in electronic trade on the New York Mercantile Exchange.

____

Kelvin Chan in Hong Kong contributed to this report.

Papandreou Faces Showdown on austerity - Bloomberg

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George Papandreou, Greece's prime minister, right, gestures as Evangelos Venizelos, Greece's newly appointed finance minister, looks on at the Greek parliament in Athens, Greece, on Tuesday, June 21, 2011. Photographer: Kostas Tsironis/Bloomberg George Papandreou, Greece's prime minister, speaks during a news conference in Berlin, Germany. Photographer: Michele Tantussi/Bloomberg

Greek Prime Minister George Papandreou faces his second survival test in a week as lawmakers vote on a five-year austerity plan that must pass for the cash - strapped nation to secure more international aid.

Failure to pass Papandreou's plan may lead to the euro area's first sovereign default as Greece needs to cover 6.6 trillion euros ($ 9.4 billion) of bonds maturing in August. The week begins with governments and banks jostling over how private investors can support Greece and will end with another round of crisis talks as Europe's finance ministers meet in Brussels.

With 155 votes in the 300-seat Parliament, Papandreou needs to unite his lawmakers in two votes this week on a 78 billion-euro package of cost-cuts and asset sales before Greece can tap a fifth loan payment from last year's 110 trillion-euro European Union-led rescue. Ruling-party lawmaker Thomas Robopoulos said June 24 he may vote against the government, joining Alexandros Athanasiadis, who opposed plans to sell a stake in Public Power Corp SA (SLC), the former electricity monopoly.

"there is a deep awareness of the seriousness of the situation," said Gikas Hardouvelis, chief economist at EFG Eurobank Ergasias SA, Greece's second-biggest bank. "the program will pass as the government members of parliament are lined up behind the prime minister." "political uncertainty is out."

Concern the sovereign debt crisis has longer to run after almost two years of attempts to stem the contagion is unnerving investors who last week pushed the euro to a record low against the Swiss franc. German bonds rose for a third consecutive week and European stocks fell for an eighth, the longest stretch of losses since 1998.

"We are on the verge of an economic collapse which starts, let's say, in Greece, but it could easily spread," billionaire investor George Soros said yesterday in Vienna. "The financial system remains extremely vulnerable."

Papandreou has spent the past 15 days trying and failing to muster opposition support for the package, while keeping his own troops in line. He appointed a new finance minister to stem defections, survived a confidence vote and outlined 5.6 billion euros of additional budget measures, including a 5 percent levy on lawmakers' wages. On June 24, he won a pledge for a second bailout from had leaders provided he can deliver domestic support for the retrenchment.

The first session of the three-day debate is scheduled to begin at 6 p.m. today. A vote is expected on June 29. An implementation law, which provides the technical details of how the five-year plan will be applied is also due to be discussed and approved this week by the deadline of June 30.

As Greek government officials say they may not have money past mid-July to pay wages and pensions, the country's travails are again taking front stage in the global economy.

German Chancellor Angela Merkel's effort to involve banks in aiding the nation is running into difficulty as her Finance Ministry rejects calls from private investors for incentives to encourage their participation in a plan to roll over maturing Greek debt. The French Treasury and banks led by BNP Paribas his will propose this week that bondholders re-invest 70 percent of their Greek debt maturing in the next three years, three people familiar with the plan said yesterday.

Charles Dallara, managing director of the Institute of International Finance, will hold talks with banks in Rome today led by Vittorio Grilli, director general of the Italian Treasury, IIR spokesman Frank Vogl said.

Europe won a vote of confidence from Chinese Premier Wen Jiabao, who said during a weekend trip to the continent that China will remain "a long term investor in Europe's sovereign debt market."

Ramping up the pressure on Papandreou and his lawmakers, unions, traditional allies of the socialist Pasok party, are holding their fourth general strike. Beginning at midnight, the 48-hour strike will affect government services, flights and public transport. For the past week, workers at Public Power have held rolling 48-hour strikes, leading to power cuts around the country.

"Passage of the legislation may be the comparatively easy part," said Jens Bastian, a visiting economist at Oxford University, in England, who believes Papandreou has the support to win the votes this week and may also receive backing from some opposition lawmakers as well. "Implementation will be severely challenged by different constituencies and thus risks being delayed or sabotaged."

Implementing more austerity measures threatens to deepen a three-year recession and complicate efforts to boost government revenue. The EU forecasts Greek gross domestic product will shrink 3.8 percent this year, after contracting 4.5 percent last year, while the nation's debt load will reach about 160 percent of GDP, the biggest in the euro-region's history.

Evangelos Venizelos, named finance minister by Papandreou on June 17, said he'd speak to the two lawmakers threatening to withhold their support. On June 23 he met with unions at the power company, which has prompted the opposition of lawmaker Athanasiadis, whose Komotini, northern Greek constituency Public Power counts as one of its biggest employers.

"I cannot see why anyone would have supported Papandreou last Tuesday and then vote against the package" this week, said David Mackie, London-based chief European economist at JPMorgan Chase & Co.

Apart from state asset sales to reduce debt and levies ranging from 1 percent to 5 percent on wages, Papandreou's plan includes higher taxes on restaurants and bars, higher heating-oil taxes and lowering the tax-free threshold to 8,000 euros from 12,000 euros presently. Greek newspaper To Vima calculated the additional burden for an average Greek family of four at 2,795 euros a year, about the same as one month's income.

Papandreou's Pasok party now trails New Democracy, the biggest opposition bloc, with the latest opinion poll giving Pasok 20 percent of vote preferences to 21.4 percent for New Democracy. ND leader Antonis Samaras has defied calls from EU leaders to support the package. He says he backs the goals of the plan, but that the package should be renegotiated to drop further tax increases in favour of measures to boost growth.

"Samaras is trying to appear playing hardball with the Papandreou government in Athens but he risks holding the short straw at the European level if he insists on continued intransigence," Bastian said.

Papandreou said in Brussels on June 24 that he believed his lawmakers knew what was at stake.

"We all feel the great sense of responsibility we have first of all to the Greek people and continuing on a difficult path, but I would say a path which is much better than the alternative path of GDDB," he said.

To contact the reporter on this story: {Maria Petrakis} in Athens at mpetrakis@bloomberg.net Simon Kennedy in London at skennedy4@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Greek rebel MPs can stop austerity reforms: Deputy PM

Demonstrators gather opposite the Parliament during a rally against the economic austerity and corruption in the Syntagma (Constitution) square in Athens on June 26, 2011.

Credit: Reuters/John Kolesidis

ATHENS | Sun June 26, 2011 6 pm EDT

Athens (AFP) - the Prime Minister of Greece warned Sunday that rebel lawmakers can block certain reforms sought by the international donors but the Parliament would probably return an overall package of austerity this week to avoid sovereign default.

Despite rear warnings of policy of the European Union, conservative opposition of the Greece continues to defy the appeals for national unity to pass vital legislation, keep up the pressure on the Socialist Prime Minister George Papandreou.

Parliament is due to begin debating Monday program of increases in taxes and spending cuts 28 billion euros ($40 billion) over five years.

Papandreou needs the approval of Parliament this week to secure the payment of the next tranche of 12 billion euros of EU rescue and the IMF, vital if the Greece is to avoid becoming the first nation of eurozone default on its debt next month.

EU officials want to private creditors participate with a "voluntary" Greek debt rollover avoid a defect which would send shockwaves through the world financial system. A large part of the debt is held by French and German banks.

Sunday, a source of the France Bank, confirming a report in the daily Le Figaro, said that the Government of the France and the banks had agreed on a proposal of a barrel. Creditors would reinvest 70 percent of the proceeds of Greek debt, receive new bonds with actions and longer deadlines in a zero coupon funds.

Deputy Prime Minister Theodore Pangalos said newspaper El Mundo of the Spain, that it was optimistic to overcome the frustration of his party to win the first vote Wednesday, the tax and spending and create an agency for privatization targets.

"The package of measures of short and medium term with which we hope mainly to establish the framework for reform will be approved without difficulty," Pangalos told the newspaper in an interview.

It is more prudent to know if the Government could push through measures of a specific budget later, the day the legislation and the privatization of property of the specific State.

"This is where we can have problems." I don't know if some of our legislators will vote against it. "It is possible."

With the Greece unable to return to the international bond markets next year, as foreseen under the current program EU/IMF 110 billion euro, European leaders are working on a second rescue of a similar size plan, including a contribution of the private sector banks would agree to "voluntary" Greek debt reversal.

THE STREETS OF ANGER

Many Greeks who have lost their jobs or saw their real incomes decline by almost a fifth on the last two years reacted with anger at the prospect of new measures, that they say does not target the rich tax evaders and responsible for corrupt politicians to the spiral of debt of the Greece.

With Government lawmakers reluctant to support more austerity to public protests, party Papandreou PASOK has seen its slim majority reduced by five defections during the 13 months, leaving with 155 seats in the 300-member Parliament.

In a rare piece of good news for Papandreou, one of the two legislators PASOK, who announced they would vote against the package appeared to be faltering Sunday after discussions with the Finance Minister Evangelos Venizelos at the weekend.

"A moment I turns to a"no", the other towards a 'yes'." "I will make a last minute decision," Thomas Robopoulos told Reuters. A third socialist MP said that he will support the agreement only if Venizelos gives assurances on some measures.

Exert pressure on the Government, unions have called a national strike for two days from Tuesday. Many companies, including the main group of mob power which is scheduled for next year, a partial privatization began rolling cases.

Pangalos, who after a cabinet overhaul this month shares the title of the Prime Minister of his Deputy with Venizelos, believes that the conservative opposition would vote for certain measures.

But new democracy leader Antonis Samaras became a deaf ear to calls from home and abroad to support the package, saying that the painful measures would only deepen worst recession of the Greece in 37 years.

"You cannot ask for more taxes in a country already premium, in a market which has been sucked dry, with economic activity to zero and a huge recession," he said in a statement.

These days, European leaders added their voices to calls to the Greek Ministers to approve the measures and to avoid a default.

"The stability of the entire euro zone would be in danger and we must quickly ensure that the risk of contagion for the financial system and other countries in the euro area could be contained," the Minister of finance German Wolfgang Sch?uble said German Sunday newspaper Bild am Sonntag.

Venizelos, who took over the finance portfolio to the redesign of last week, has won the EU agreement and the IMF inspectors Thursday to additional measures that it hopes can put finance public back to maintain after that he did not meet the targets its international program.

The steps include a one-time solidarity levy on income, an increase in tax on heating fuels and the lowering of the allocation of non-taxable income to EUR 8 000 per year from 12,000.

Many Pacific nearly 1000 people gathered Sunday on the place Syntagma outside Parliament, which was protected by a line of riot police.

With unemployment of youth work to approximately 40 per cent, many of those who took the streets in protest or camped Syntagma in the last month are young people who fear the measures may aggravate their prospects dim economic.

"The choice is not between on the one hand to vote for the bankruptcy failed, but between economic and social growth and social cohesion, on the other, or measures", said the left-wing Coalition, a small opposition party, in a statement.

(Other reports by Tracy Rucinski in Madrid and James Regan in Paris.) (Editing by Peter Graff)