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Friday, March 29, 2024

EMU Collapse Update: Greek Aid To Be Approved By End Of Next Week, Parliament Approval Still To Be Needed

Courtesy of Tyler Durden

Goldman scrambling to prevent Humpty Ponzi from falling of the well. The latest update from GS’ Dirk Schumacher.

German finance minister Schäuble , ECB president Trichet and IMF head Strauss-Kahn just ended their press conference in Berlin. Trichet and Strauss-Kahn met earlier today with parliamentary leaders to brief them on the Greek help package.

Finance minister Schäuble said that the end of negotiations between IMF and Greek government could be reached by the end of this week.

Once that agreement is reached the German government will introduce a law on the Greek help package into the Bundestag. Parliament approval (including the second chamber of parliament) could be reached by end of next week. A necessary condition for this is that all parties agree on a fast track legislation; judging from the statements made by MPs after the meeting ECB president Trichet and IMF head Strauss-Kahn were able to convince everybody on the need to act quickly.

Schäuble also stressed that the market reaction over the last couple of days showed that the tensions are spreading beyond Greece and that the stability of the whole Euro-zone was at risk.

Some participants of the meeting were cited afterwards that Strauss-Kahn said that the Greek help package could be €100-120 billion and the floor leader of the Green party Trittin said that the German share could be up to €25 billion. When asked during the press conference Strauss-Kahn denied to comment and said that nobody would know at this time how much money was needed.

There will be another press conference by chancellor Merkel at 3:45 London time. But it is already clear that we have moved significantly closer to an approval of the financial help package. The market reaction over the last couple of days should have made clear to German politicians what is at stake. The still open question is how specific the draft law is going to be with respect to an extended help program (one that goes beyond the 30 billion already agreed for this year). Judging from the press conference the German government does not want to be too specific at this point.

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