Greek Talks Stuck in the Mud – EUR/USD Follows

Negotiations in Greece are going nowhere – there are significant disagreements on labor laws and there are also differences within each side. The troika refuses to make any concessions on labor laws.

An unconfirmed report about PASOK joining Democratic Left in its stance against labor reforms raises worries that the government in Athens could fall. EUR/USD is also stuck in the mud, struggling to hold above support.

Greece’s finance minister announced that EU / ECB / IMF troika isn’t willing to make any concessions on easing the reforms, as suggested by the Democratic Left party.

The party has demanded the troika of European Commission, European Central Bank and IMF lenders allow a national wage agreement to apply to all employees rather than just unionized workers. It also wants the lenders to withdraw a plan to axe the 10 percent salary hike employees get when they marry.

“The troika has not accepted the (party’s) demands, » Finance Minister Yannis Stournaras told reporters.

The government led by New Democracy could still survive as long as it gets support from another coalition partner: PASOK. However, a new unconfirmed report says that PASOK now sides with the Democratic Left.

New Democracy does not command a majority in parliament. Nevertheless, past experience tells us that Evangelos Venizelos, leader of PASOK that led the first bailout, could eventually side with more austerity.

EUR/USD is now trading just above the 1.29 line, struggling to hold on to this line. Further support is at 1.2814, and resistance is at 1.2960. For more lines, events and analysis, see the euro usd forecast.