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Deadlocked Greece coalition talks enter fourth day

Text by News Wires

Latest update : 2011-11-10

Greece's political leaders entered a fourth day of unity talks Thursday, as their failure to find a new premier heightened concerns among eurozone partners and global stock markets.

AP – Greece’s tortuous power-sharing talks entered a fourth day Thursday, with the country’s president hosting a meeting of party heads a day after negotiations descended into chaos and political leaders failed to name a new interim premier.

Outgoing Prime Minister George Papandreou, the head of the opposition conservatives, Antonis Samaras, and the leader of a small right-wing party were meeting with the president Thursday morning to settle on a new prime minister and cabinet.

The new temporary government’s aim will be to secure a new European debt deal and ensure Greece receives the vital next €8 billion ($10.9 billion) installment of its existing €110 billion bailout from other eurozone countries and the International Monetary Fund. Without the loan, the country faces a catastrophic default within weeks. Elections are then expected to be held in February.

Thursday’s talks come after a similar meeting Monday night collapsed, with Giorgos Karatzaferis, the head of the right-wing LAOS party, storming out in a rage only minutes after entering the presidential mansion. The precise reason for his anger was unclear.

The hope is that the fourth day of talks will finally yield a new prime minister to head an interim government that will secure the country’s continued bailout funding. European leaders have been pressing for an end to the political turmoil in Athens that has endangered the country’s bailout funding and even its continued presence in the eurozone.

“This is the third time I’m coming here for (this) issue, and I hope it’s the last,” Samaras said as he arrived for the meeting.

Despite three days of wrangling and intense European pressure, Greece’s main parties have been unable to agree on who will lead the new government, which is expected to only be in power for a few months before leading the country to early elections in February.

Greece’s deliberations over the past few days have taken a backseat to developments in Italy where Premier Silvio Berlusconi has announced his intention to resign soon after a new package of economic reforms are passed.

But his announcement has done to little to assuage market concerns that Italy is facing a Greek-style economic crisis and the country’s borrowing costs have shot through the roof.

The turmoil has led to intense concern on markets and international pressure for a quick resolution.

“I believe that many lenders, many investors actually expect something to happen to give political clarity,” said IMF chief Christine Lagarde during a visit to Beijing. “It’s much needed in Greece, it’s much needed in Italy. There is clearly some rumors, trepidation, expectations. No one really understands who is going to come out as the leader, and I think that confusion is completely conducive to volatility.”

The latest Greek crisis erupted last week, when Papandreou said he would put a hard-fought €130 billion ($177 billion) European debt deal, that involves private bondholders canceling 50 percent of their Greek debt holdings, to a referendum.

The shock announcement horrified European leaders, sparked a rebellion in his own party and battered financial markets.

After the vicious reaction his plan was met with – and an opposition party pledge to support the deal – he withdrew the referendum plan and agreed to stand aside, half way through his four-year term.

But after a historic deal with Samaras Sunday night to form the transition government, negotiations dragged on with no signs of progress despite repeated expectations that a new premier would be announced on Monday, then Tuesday and finally Wednesday.


Date created : 2011-11-10


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