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Opposition party drops insistence on early elections

Text by News Wires

Latest update : 2011-12-28

Greece's conservative New Democracy party, leading in the opinion polls, agreed on Wednesday to postpone elections until April, thereby allowing technocrat PM Lucas Papademos more time to implement a crucial debt restructuring deal.

REUTERS - Greece’s conservative New Democracy party on Tuesday dropped its insistence on holding elections as early as Feb. 19, potentially giving technocrat Prime Minister Lucas Papademos a few more weeks to pass reforms and get a vital debt restructuring deal.

New Democracy spokesman Yannis Michelakis said the party could agree to an extension under certain circumstances but said that elections would have to be held at the latest by Greek Orthodox Easter, which falls on April 15.

“Any change to the agreed Feb. 19 deadline depends on the debt swap talks,” Michelakis told radio station Vima.

The election date had been tentatively scheduled before Papademos was appointed last month but a crowded reform agenda has piled pressure on the government to put back the date.

Political deadlock over the timing of the election has also complicated efforts to reach an accord on a 130 billion euro ($170 billion) bailout plan that includes a crucial bond swap arrangement with private sector creditors.

Papademos, a former central banker appointed to secure the bailout agreement, is racing to complete tax, pension and justice reforms demanded by the European Union and the International Monetary Fund, debt-laden Greece’s lenders.

New Democracy leader Antonis Samaras, who is leading in the opinion polls, softened his stance after meeting Papademos on Friday but is less willing than other members of the caretaker coalition to extend the deadline further.

The Socialist PASOK and the far-right LAOS parties, both members of the government backing Papademos, have already said the prime minister should be given more time to complete his task.

“We would have no objections if elections were held even after Easter,” PASOK spokesman Panos Beglitis told reporters on Tuesday after a 90-minute meeting between Papademos and Socialist leader George Papandreou.

“The government’s political horizon has become clear. Elections will take place after Easter, at the end of April,” Finance Minister Evangelos Venizelos told a PASOK party meeting on Tuesday, according to a party official.

Papandreou’s Socialists handed over power to Papademos last month, after PASOK deputies refused to bear sole responsibility for sweeping austerity measures demanded by the EU and IMF.

PASOK’s opinion poll ratings have collapsed in recent months and Papandreou may face a leadership challenge.

The timing of an election has been closely watched as negotiations have continued between the government and banks over a deal in which private sector lenders would accept a nominal 50 percent cut on their holdings of Greek bonds in return for a mix of cash and new bonds.

The arrangement is intended to cut Greece’s debt by 100 billion euros, allowing it to bring its debt from 160 percent of gross domestic product to a still huge but more manageable 120 percent by 2020.

The so-called Private Sector Involvement (PSI) forms a central element of the overall bailout package, which Greece urgently needs to stave off a bankruptcy that could destabilise the entire euro zone.($

Date created : 2011-12-28

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