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Europe

Greek conservative leader Samaras sworn in as PM

Text by News Wires

Latest update : 2012-06-20

Antonis Samaras, head of Greece's conservative New Democracy party that won the most seats in Sunday's election, was sworn in as prime minister of a three-party coalition government on Wednesday afternoon.

AFP - Conservative leader Antonis Samaras was sworn in Wednesday as the prime minister of new Greek coalition, as he took up the challenge of trying to revise the terms an unpopular EU-IMF bailout deal.

"I wish you good luck because the problems you have ahead of you are many and difficult," President Carolos Papoulias said before swearing in Samaras at a ceremony int he presidential palace following three days of coalition talks.

Samaras and his New Democracy party, the winners of an election on Sunday, are the senior partners in a coalition with the socialist Pasok party.

The government will also have the parliamentary support of the small Democratic Left party.

"I have the majority to form a long-term government of stability and hope," said Samaras, a US-educated former foreign minister.

Pasok leader Evangelos Venizelos said the new government would begin the battle to get the bailout deal rewritten at an EU summit next week.

"In those two days in Brussels we will carry out a major battle for revision of the loan and negotiate a framework that will boost the recovery and the fight against unemployment," Venizelos said.

New Democracy won a narrow victory on Sunday against the radical leftist anti-austerity Syriza party which has refused to support the coalition and is bitterly opposed to the terms of the bailout.

Democratic Left leader Fotis Kouvelis said he expected the cabinet to "release the country from the painful terms" of the multi-billion bailout.

National Bank of Greece chairman Vassilis Rapanos, a former professor of economics who served in the government when Greece joined the euro in 2001, is widely tipped to be the new finance minister, Greek media reported.

After two months of political deadlock, the struggling eurozone member is under intense international pressure to get back on track with reforms promised for a bailout that has kept the economy on life support for the past two years.

The International Monetary Fund is already pressing to send a team of experts to Greece as soon as possible to examine "shortfalls" over the past two months.

New Democracy took 129 of the 300 parliamentary seats including an extra 50 seats given to the winner and Syriza took 71 seats after garnering more than a quarter of the vote in a country struggling with its fifth year of recession.

Pasok took 33 seats and Democratic Left won 17 seats, which would give the expected new government a majority of 29 seats to pass controversial reforms.

The government's first priority will be to restore contact with international auditors and resume the flow of loans that was suspended ahead of the election.

Foreign creditors like Germany have stressed that they are only willing to give Greece more time to meet a deficit reduction target currently set at 2014 but will not change the actual substance of the bailout deal agreed in February.

The 61-year-old Samaras, a US-educated former foreign minister, is under pressure to go further, however, and promised in his campaign that he would cut property and sales taxes and freeze reductions in public salaries and pensions.

"There can be no discussions about changing the substance of the agreements but as I indicated three or four weeks ago we can by all means talk about extensions," Eurogroup chief Jean-Claude Juncker told Austrian radio on Tuesday.

But ahead of talks among euro finance ministers on Thursday, a senior European Union official appeared more open to possible concessions, saying it would be "delusional" and "stupid" to keep the loan agreement intact.

"We would be signing off on an illusion," the source said.

This "will not be done in two weeks' time," the official said, but likely "in the course of the summer."

Under the current conditions, Greece has to cut 11.5 billion euros -- the equivalent of five percent of its gross domestic product -- by 2014, although Greek parties have called for this deadline to be put off to 2016.

Greece has been forced to seek bailouts twice after initially hiding its debt woes, first for 110 billion euros in 2010 and then for 130 billion euros earlier this year. It has also had a 107-billion-euro private debt write-off.

Greece has stepped up short-term debt auctions to restock its depleted treasury, as officials cited in the Greek press warned before the elections there were only enough cash reserves to pay salaries and pensions until July 20.

Its banks are also in pretty poor shape despite a recapitalisation effort.

The eurozone is hoping the result can draw a line under a lengthy period of uncertainty that has unsettled markets in a country where the European sovereign debt crisis kicked off in 2009 before spreading across the continent.

 

Date created : 2012-06-20

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