Greek PM George Papandreou was on Sunday poised to pursue his bid to form a unity government to push through an unpopular but vital €130 billion bailout package, while the main conservative opponent has called instead for snap elections.
REUTERS - Greek party leaders bickered on Sunday over the formation of a crisis coalition, with the finance minister under pressure to secure rescue funding by telling his European peers within 24 hours that the nation can restore political stability.
In the hunt for an elusive national consensus, President Karolos Papoulias met the conservative opposition leader, shortly before the socialist cabinet was due to hold a special session.
“This uncertainty that is torturing the Greek people must end. We must find a solution,” Papoulias said before starting closed-door talks with New Democracy leader Antonis Samaras.
But Samaras rejected any compromise while George Papandreou remains prime minister.
“I am determined to help. Provided that Papandreou resigns, everything will take its course,” he said after the talks, without saying explicitly whether he would join a coalition.
The president has called on parties to cooperate in resolving the crisis after a tumultuous week when Papandreou first announced and then ditched a plan for a popular vote on a euro zone bailout, leaving his grip on power weakened.
With the presidential appeals for consensus falling on deaf ears so far, Finance Minister Evangelos Venizelos—who is playing a leading role in efforts to create a government of national unity—has some explaining to do soon.
Venizelos is under heavy pressure to tell fellow euro zone finance ministers in Brussels on Monday that Greece is on the way to reaching a broad national consensus on backing the 130 billion euro bailout deal agreed last month.
That deal, which imposes yet more austerity on the long-suffering Greek population, aims not only to save Greece from bankruptcy but also to prevent its problems plunging much bigger economies such as Italy and Spain into full-blown crisis.
Government spokesman Ilias Mossialos expressed optimism without saying what advances towards agreeing on a new government, if any, had been made. “The process could be completed by mid-week and it would be a good idea if it were completed as soon as possible,” he told state television.
But the omens were not good. Newspapers were packed with speculation over various scenarios that could emerge from the behind-the-scenes talks. The Kathimerini daily called it “Haggling aboard the Titanic”.
On the face of it, Venizelos may have little to offer at Monday’s Eurogroup meeting in Brussels.
He has already received one lecture when German Chancellor
Angela Merkel and French President Nicolas Sarkozy summoned him and Papandreou before a G20 meeting in Cannes last week.
The leaders made clear that Greece would receive not one cent more in European aid until it had signed up to the latest bailout, the second package since Athens had to go cap in hand to the European Union and IMF in May last year.
Greeks have fought the pay and pensions cuts, combined with higher taxes, demanded by the international lenders with a series of strikes and protests, some violent.
But the state is due to run out of money in December, when it has big debt repayments to meet, and by then needs the sixth instalment of its existing EU/IMF bailout package.
Greece must banish uncertainty
IMF Managing Director Christine Lagarde said last week she
would make a recommendation on the next tranche to the IMF board "as soon as the referendum is completed, and all uncertainty removed".
Papandreou has already ditched the referendum plan, but Venizelos will have a hard time saying on Monday that all uncertainty has been removed, unless the talks leap forward.
A senior New Democracy official said Samaras was willing to negotiate a government of politicians, rather than one comprising technocrats, if Papandreou stepped aside.
Having demanded snap elections, he might be willing to discuss a date later than his preferred early December vote.
The source made no mention of who might lead the government but New Democracy is unlikely to accept any top member of the ruling PASOK party such as Venizelos.
The socialist and conservative plans to resolve the stalemate are also at odds.
Only a week ago the bailout deal seemed in the bag, but then Papandreou dropped the referendum bombshell, prompting widespread fear that Greece might be forced out of the euro and have to go it alone with a revived national currency.
"Europeans don’t trust us anymore, they will throw us out," said Tassos Pagonis, a 48-year-old Athens taxi driver. "I hope we don’t return to the drachma.”
Date created : 2011-11-06