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Europe

Greek prime minister calls May 6 election

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Text by News Wires

Latest update : 2012-04-11

Greece's Prime Minister Lucas Papademos called a general election for May 6 Wednesday, after his government spent five months pushing through harsh austerity measures to secure a vital international bailout and a major debt relief deal with banks.

AP - Greece’s prime minister on Wednesday called a general election for May 6, after his coalition government pushed through landmark financial relief deals that rescued the country from the threat of bankruptcy, but condemned his recession-hit countrymen to greater hardship.

Lucas Papademos, a former vice president of the European Central Bank, was appointed premier in November and spent five months pushing through harsh austerity measures in order to secure a vital international bailout and a major debt relief deal with banks.

“The main goals of our government were achieved,” Papademos told a Cabinet meeting, according to a government transcript. “But to complete and secure the effort to right the economy, important decisions have to be taken immediately.”

He said these included a new austerity program from 2013-16, implementation of cutbacks and structural reforms “needed for the Greek economy to grow viably and for the country to remain within the eurozone.”

Opinion polls have indicated that no party will be able to win the majority needed to govern alone, but it remains unclear whether the country’s main political leaders will agree to a new power-sharing deal. A new survey found that roughly one in two voters favor a coalition government.

Papademos met later with President Karolos Papoulias to make the formal request for the election, 18 months before parliament’s current term expires.

In a televised evening address to the nation, he urged voters to back policies that will keep Greece in the European Union and the eurozone.

“Our decisions will not just be about who will be in government on the day after the vote,” Papademos said. “They will determine the course of Greece in coming decades.”
The government will remain in office until the elections to ensure implementation of legislated reforms, Papademos told his Cabinet.

“We can’t waste a single day,” he said. “This electoral campaign is unlike others. Many issues cannot wait for handling until after the elections.”

Papademos said one major outstanding issue is the recapitalization of Greece’s banks, which were hard-hit by the country’s privately-held debt writedown that cut the face value of their Greek bond holdings by more than half through a massive swap deal.

A government official said the Cabinet passed an act of legislation that gives the state the option to issue guarantees allowing domestic banks to register the worth of their Greek bonds at face rather than market value, which is considerably lower.

The official, who spoke on customary condition of anonymity, also said the takeup for the bond swap has reached 96.6 percent of the bonds involved, which are worth a total €205.5 billion ($270 billion).

After fending off bankruptcy with two massive international bailouts - and more than two years of pain that left Greek society reeling - the government is still struggling to contain its profligate spending habits. Last year’s budget deficit exceeded 9 percent.

But preliminary figures released by the finance ministry Wednesday indicated deficit-cutting measures paid off in the first quarter of 2012. On a cash basis, the January-March deficit reached €7.3 billion ($9.6 billion), compared to a target of €8.6 billion ($11.3 billion).

The primary deficit - which excludes the cost of servicing Greece’s huge debt - was €365 million ($479 million), well below the €1.4 billion ($1.8 billion) target. While revenues slightly underperformed targets, spending was nearly €1.5 billion ($2 billion) less than budgeted.

Opposition conservatives reached the power-sharing agreement with the majority Socialist Pasok party in November after parliamentary opposition to austerity measures brought the previous government of Socialist Prime Minister George Papandreou to the brink of collapse.

The two traditionally dominant parties have seen their popular support hammered as Greeks endure a fifth year of recession and suffer repeated rounds of wage and benefit cuts as the unemployment rate surged to 21 percent.

The conservative New Democracy party, led by former Foreign Minister Antonis Samaras, is leading in the opinion polls for the next election. However, the polls suggest it will not receive enough votes to form a government and would have to seek another coalition with the Socialists, as smaller parties fiercely oppose the terms of bailout agreements.

A Public Issue poll for private Skai TV published Wednesday set support for the conservatives at 19 percent, followed by Pasok at 14.5 percent. More than 50 percent of respondents backed one of about half a dozen disparate anti-austerity parties, which cover a broad and irreconcilable range from the Stalinist Communist left to the extreme right.

A fringe neo-Nazi group polled at 5 percent, above the 3 percent parliamentary entry threshold. The telephone poll was conducted between April 3-9, and gave a 2.9 percent margin of error.

Samaras’ main opponent, Evangelos Venizelos, resigned as finance minister on March 19 to run in the election as leader of the Pasok party.

“This is the first time voters in such large numbers will cast ballots to punish political parties,” Elias Nikolakopoulos, a professor at the Department of Social Theory and Sociology at Athens University and a veteran pollster, told Associated Press Television.

“The challenge for the two main parties in the May 6 election will be to receive a combined vote of more than 50 percent. At the moment, it appears their level of support is about 42 percent,” he said.

“Of course it would be technically possible to form a government with less support, something like 38-39 percent. But politically they need at least 50 percent.”

Date created : 2012-04-11

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