Papademos’ Resignation Rumors Denied – Angry Coalition Gov’ Partners

Oh, these rumors can bring down currencies. The EURO sharply declined towards the US-Dollar when rumors appeared on international media that Greek PM Lucas Papademos might resign if the party leaders of his coalition government do not back him on the second loan agreement with the country’s lenders. The rumors circulated among local and foreign journalists on Friday afternoon, and even some Greek and international media reported about them.

Private broadcaster “Skai TV and radio reported on Friday that should the leaders fail to agree a deal, Papademos will tender his resignation on Monday” wrote the English version of news paper Kathimerini on its website. Skai’s article “Possible Papademos resignation without a deal?” is here.

Rumors Denied

Later on the day,  government spokesman Pantelis Kaspis denied that Papademos is considering quitting. “There is no such issue” Kaspis told Bloomberg  in a telephone interview.

Angry Coalition Gov’ Partners

Coalition partners are up in arms with the Troika demanding major cuts in the wages and labour rights of private sector, lowering the minimum wage from 751 euro gross down to 561 euro ( I heard this morning on tv , for employees up to 30 years old), abolishing the 13th and 14th salary,  cuts amounting to 25%. Concerning the public sector, on Friday evening  the Troika put on the table lay- off  also security forces and teaching personnel. the Troika demands that 150,000 civil servant would be dismissed until 2015, private ALPHA TV reported on its prime times news.

Coalition government partners are in a big dilemma: refuse to accept the Troika demands and risk the country’s bankruptcy or accept them and risk the future of their voters and their own? Tough bargain is taking place at all fronts.

Papademos has repeatedly postponed the meeting with he party leaders PASOK’s George Papandreou, New Democracy’s Antonis Samaras, and Giorgos Karatzaferis of the Popular Orthodox Rally (LAOS) and ask their commitments and written pledges on the new loan agreement. The meeting will most likely take place on Saturday noon.

Nevertheless coalition government partner,  conservative Nea Dimokratia got angry about the rumors of Papademos resignation as they understood it as a ‘leakage’ to put pressure on the government partners. ND officials told Proto Thema “Papademos should be tough abroad, when he negotiates with the Troika and not inside, towards the political parties and the Greek people.”

Papademos resignation would blow up the negotiations between Greece and its lenders on the second rescue package and the Greek bond swap (PSI). After ex PM George Papandreou who resigned last November, Papademos would be the second prime minister to fall victim of the economic crisis.

EURUSD Tumbles On Rumor Of Papademos Resignation, Eurogroup Meeting Delay

“EURUSD longs just got punk’d again, with the EURUSD surging to over 1.32 on the fake BLS number (1.2 million labor force decline, whatever, with ), when it collapsed by 100 pips as the news we tweeted earlier that Greek PM Papademos may resign today throwing the entire Greek bailout out of the window, if his talks for further austerity fail.” (zerohedge)

Athens Stock Exchange did not feel better either. It plunged -3.82% below 800 points at 762.15p.