Government directive forces banks to stress test a 30% haircut

Today, October 6th, Evangelos Venizelos is informing PASOK MPs on developments, while Giorgos Papandreou is presiding over the government committee and Parliament is voting on the new bill of law on reserves and the new payroll etc. Parliament members and top PASOK officials are now awaiting answers. Will there be a “haircut”? What will it mean for banks, funds and the Greek people? How much will it amount to? Is the Prime Minister actually thinking about a referendum or a coalition government? Will there be elections?

According to sources, the government has instructed banks to conduct stress tests concerning a “haircut” possibility of 30%! Some can stand such a test and some cannot, hence the emergency meeting between Venizelos - Provopoulos - Pantalakis last night, as Agrotiki Bank is one of the weakest links. In order to proceed with the “haircut”, lenders are asking for even more measures. They are requesting salary cuts in the private sector, believing that this would pave the way for investments, which would lead to Greece’s exit from the vicious cycle of recession.

For all the above reasons, the government committee’s members will seek clear answers from the Prime Minister and the Minister of Finance. Top government officials will highlight the need to participate in policy planning for, as they state, “we cannot be updated through the news”. “ Joint responsibility means cooperative decision-making”, as stated by a top minister to his peers only last night.

All this, of course, is taking place on the day that Germany’s Finance Minister Phillip Roesler is expected in Athens, bearing - according to sources- a possible draft of Greece’s controlled default!