On Friday Greece’s Parliament will be making a no confidence vote for Prime Minister George Papandreou. If he is voted out, Greece will enter the week-end without an intact government.
On Thursday at the G20 Summit, Prime Minister Papandreou changed his tone and ended his call for a Greek referendum vote with the European Union’s bailout agreement.
Papandreou refused to resign as Greece’s Prime Minister and explained to his ministers that the referendum threat had been a gambit to force the opposition party, New Democracy, into supporting the painful bailout plan.
Papandreou’s Pasok Socialist Party has a slight majority with 152 out of 300 seats. BBC has reported that 3 members of the Pasok Party have indicated that they will vote against Papendreou when it comes to a vote.
If a no confidence vote for Panadreou’s resignation occurs, it begs the question about whether the change in Greece’s leadership will result in the cancellation of the EU bailout agreement and Greece’s cessation from the European Union.
A new election could take weeks before a new Greek leader emerges. This longer election time frame has the potential to complicate, delay, or even prevent Greece from receiving their 6th tranche of bailout money from the European Union.
Although recent polls have signaled that the majority of Greeks are in suppport of remaining in the European Union, a significant number of Greeks are opposed to the austerity measures that are contained within the EU bailout agreement primarily because it will lead a cut in pensions and salaries along with new taxes. Many Greeks are also concerned about losing their sovereignty.
The two dominant themes of the G20 summit are Greece and the stability of the European Union. At the summit there have been some countries such as Russia, India and other Bric Nations (Brazil, Russia, India, China) who have expressed interest in loaning money through the IMF to shore up more reserves for handling a crisis in the European Union.
A couple of the other critical issues discussed at the G20 meeting centers around boosting the scope of the European rescue fund (EFSF) and re-capitalizing banks that are exposed to European debt.
America’s Jobs Report
The American jobs report on Friday will clearly set the pace of trading for the American markets. Analysts are expecting Non-Farm Payroll number of 95,000 added jobs. The unemployment rate is expected to remain at 9.1 %.