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Germany's Critical Main Opposition Party Says "No Greek Bailout "

Tyler Durden's picture




 

The one critical piece to a successful Greek bailout (if one can call 10 year Bond spreads at 8% any indicator of success) has been the implicit assumption that the proposed rescue package can pass the critical approval of the German parliament in order for it to become legislatively valid. Reuters reports that in a new, pre-electionary development, Germany's main opposition party, the Social Democrats (SPD) have now decided to block Angela Merkel's plans for a Greek bailout, all but dooming the incipient Greek rescue even as G-Pap finally realizes that he will need to ask for assistance in the next several days.

Germany's main opposition party threatened on Wednesday to block government plans to fast-track approval of aid for debt-ravaged Greece, potentially delaying a critical bailout for weeks.

Against a backdrop of looming key regional elections in Germany, the budget spokesman for the Social Democrats (SPD), Carsten Schneider, said his party did not want to rush through any bill that might result in the government issuing guarantees for billions of euros worth of aid.

"We won't go along with this," he told Reuters. "First the government can't decide what they want to do and now they want to put us under pressure with the legislative process."

The main reason why Greece was successful in pricing 13 Week Bills this week had to do with investor beliefs that at least the €45 billion stop gap rescue will be in place, making their 3 month investment relatively safe. They may want to reconsider this assumption.

Investors are increasingly pricing in expectations that Greece will sooner rather than later tap into the aid package, agreed by euro zone states and the International Monetary Fund.

But resistance from the SPD and other parties could drag out the parliamentary approval process in Germany for weeks.

Despite Merkel's majority in the Bundestag, any attempt to accelerate the legislative process generally needed the approval of opposition parties, said Uwe Andersen, a political scientist at the University of Bochum.

Confirming that this is just yet another episode of political theater, during which any rational cause and effect disappears and which makes rational decisionmaking impossible, is the fact that opposition is now growing as more and more German parties seek to ride the wave of populist discontent with funding a Greek bailout.

Opposition to an accelerated approval process for the aid has come not just from the centre-left SPD. The conservative Christian Social Union (CSU), Bavarian sister party to Merkel's Christian Democrats, has also signalled it could do likewise.

It is, as always, stunning that America, which is not even on the same continent as Greece, and which will be forced to likely foot a major portion of a bailout, should one occur, has seen absolutely no popular reaction to the fact that it will soon be bailout out a country far, far, away.

 

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Wed, 04/21/2010 - 11:17 | 310846 etrader
etrader's picture

Hmmm there's rumours of a BA flight been forced to do a 2 engine shut down and divert to Ostend with engine damage.

Maybe things will get more delayed on the Greek issue with the "head lads" being delayed getting to Greece....

Wed, 04/21/2010 - 11:33 | 310895 Carl Spackler
Carl Spackler's picture

Jawohl!

Socialists voting against helping other Socialists.

 

 

Wed, 04/21/2010 - 11:20 | 310855 Recovery3000
Recovery3000's picture

What idiot would want to buy any Greek debt product?  Thanks to the Fed's ZIRP no one can find any yield unless it is through fat Tony's loan program with the juice at 5 points.

Wed, 04/21/2010 - 11:25 | 310874 Cookie
Cookie's picture

Leo K. wanted in at 7%!!!

Wed, 04/21/2010 - 11:42 | 310917 Internet Tough Guy
Internet Tough Guy's picture

If he liked it at 7, he loves it at 8.

Wed, 04/21/2010 - 11:20 | 310856 Recovery3000
Recovery3000's picture

What idiot would want to buy any Greek debt product?  Thanks to the Fed's ZIRP no one can find any yield unless it is through fat Tony's loan program with the juice at 5 points.

Wed, 04/21/2010 - 11:31 | 310892 terranstyler
terranstyler's picture

Come on, politics here in Germany is as crappy as everywhere. The SPD will hurry to vote for any rescue package as soon as it is the only political obstacle left in the way. Media will then praise them for their late but wise decision.

It is always like that. Stupidity is infinite and all around -.- My only hope is Axel Weber of the Bundesbank

Wed, 04/21/2010 - 11:35 | 310897 HarryWanger
HarryWanger's picture

I agree, just political posturing. They'll cave quickly when needed.

That being said, I'm watching SPX and /ES closely today. If we close below 1200 on both, we may be heading for a bit of a correction. 

Wed, 04/21/2010 - 17:02 | 311142 hedgeless_horseman
hedgeless_horseman's picture

I'm watching SPX and /ES closely today. If we close below 1200...

Listen -- lewdly-named-anonymous-spin-meisters with patriotic avatars trying to lend credibility to round-numbered-support levels of easily-manipulated indices is no basis for an investment decision.  Solid-equity-trading strategies are solely derived from a mandate from the Federal Reserve Chairman, not from some farcical Edwards and McGee ceremony.

--------------------------------------------------

And now for something not so completely different:

http://www.youtube.com/watch?v=dOOTKA0aGI0

Wed, 04/21/2010 - 12:00 | 310966 malek
malek's picture

The SPD really has become the laughing stock of political parties.
This posturing is more like grapping for straws for the upcoming NRW state elecetions.

Wed, 04/21/2010 - 12:00 | 310961 glenlloyd
glenlloyd's picture

the reason there's no outrage over this is 1) there's really been no pain here yet and 2) because people don't see / feel the connection to this there's no complaint.

If people understood the ramifications of what will undoubtedly happen here I think sentiment might be a tad bit different. Then again since it doesn't involve Lost, or Idol it gathers little attention. People have been sufficiently dumbed down.

Wed, 04/21/2010 - 12:13 | 310994 Kina
Kina's picture

They said from the very begining in the clearest of unequivocal terms that they would not pass a Greek bail out. I and others have been saying since then that there was no will or way that Germany would approve a bailout.

They will have to find another way to fudge it or simply leave it all to the IMF. My bet is for a default as it is all too late and there no Greek will and, the others are about to line up for bigger amounts.

 

Wed, 04/21/2010 - 13:34 | 311095 dcb
dcb's picture

it makes me wish i lived in germany where maybe they have a bit of democracy. It mkaes total sense. the us has the mst to loose if the global ponzi scheme is shown. so why do anything. now you have paul.

Wed, 04/21/2010 - 13:56 | 311131 dcb
dcb's picture

i just wrote ron paul begging we don't get stuck with bernanke bailing out greece.

Wed, 04/21/2010 - 14:11 | 311158 ZackAttack
ZackAttack's picture

Write your congresscritters.

Let 'em know that it's unacceptable to use US taxpayer funds to bail out European banks.

Let 'em know if they do, they're out on their collective asses.

Wed, 04/21/2010 - 14:13 | 311163 A Man without Q...
A Man without Qualities's picture

At some point somebody has to say no more to all this insanity. Any bailouts would merely delay the day on which Greek debt is restructured so rather than have it drag on for a few months, why not get it over with now?

Wed, 04/21/2010 - 14:15 | 311166 SingleCross
SingleCross's picture

In response to "... America, which is not even on the same continent as Greece, and which will be forced to likely foot a major portion of a bailout, should one occur, has seen absolutely no popular reaction to the fact that it will soon be bailout out a country far, far, away."

I'd bet that most Americans do not realize that the IMF is largely an extension of their tax dollars, via the Powerz that seem to control the TBTF and the gov.

Wed, 04/21/2010 - 14:51 | 311222 metastar
metastar's picture

Fellow Americans, enjoy your sleep. It is easier for a thief in the night (think FED) to do his work. Nothing to see here as the reaper prepares to cut your throat. Believe it when they tell you that its all for your own good.

Wed, 04/21/2010 - 15:04 | 311231 BlackBeard
BlackBeard's picture

At least they have a real opposition party.

Wed, 04/21/2010 - 16:46 | 311395 Buck Johnson
Buck Johnson's picture

German people and politicians don't want to bailout a country that not only lied its way into the EU, but made it seem that THEY and not the others are victim of this debt fiasco.  They should let Greece default and do nothing about it.

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