Chillin' out till it needs to be funded
Papa entered Parliament today amid all the commotion going live around the world but Greece has voted ( 151 for the new austerity budget as of now, 3 minutes ago: 122 for – 109 against) for more than $20 bln in additional taxes and $20 bln in spending cuts. Also promised in the budget by the new Finance Minister Venizelos is also promising Euro 40 bln froma successful divestment to fund the lower deficit target. The immediate need is Euro 12 bln or $17 bln even as the Euro had already started the day at nearer to $1.45 . US Markets also had futures trading 0.6% higher on the S&P, the Dow and the NASDAQ as the PASOK party expected to have dissenters but yet manage the 151 target.
Further down the road, the cans are going to sound up loud again when repayments of $40 bln and over come due in 2012(Euro 27 bln) and 2013(Euro 33 bln) With the US busy ahead of its own Debt ceiling revision for which the likely failure of extension from $14.3 tln on August 2 will mean a 44% cut in spending ( Bloomberg.com) power to the Federal Government. the vote is unlikely to pass muster easily with stiffer deficit targets in an election year. Meanwhile, Greece has opted to stay inside the Euro and work the difficult task, whence the GDP is likely to get cut by at least 8-9% and may even get reduced by 20% as higher taxes and almost 20% unemployment reduce the austerity years to a global theater for everyone to watch in horror bites.
On the USA front, on the chopping block first will be troops’ salaries and DoJ salaries for government staff if the debt ceiling is not increased by August 2nd as rollovers become impossible