February 13, 2012
After an epic political effort to pass another harsh austerity program into law, Greece faces still more tests to secure a new financial bailout as its euro-zone partners press for swift implementation of the new budget cuts in the face of intense popular opposition.
European financial markets responded with modest gains early Monday after Greece got a step closer to receiving a second rescue package to avoid defaulting on its debts next month.
A next big step in the cluttered approval process for the aid package is a meeting of euro-zone finance ministers, tentatively set for Wednesday, to sign off on cuts contained in Greece's austerity legislation to clear the way for the €130 billion ($171.59 billion) aid deal. A final decision on the new bailout isn't expected until March.
The euro rose against most of its major trading currencies. European stocks opened broadly higher and the cost of insuring euro-zone government debt against default eased. But market watchers remained cautious.
"There is no cause for major relief: In effect parliament only decided not to denounce further aid payments at this stage," Commerzbank foreign-exchange analysts said in a note Monday. In particular, the analysts worried whether there would still be the political will to follow through on reforms when Greece gets a new government after fresh elections, which could come as early as April.
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