Papandreou-Samaras talks on new Greek government

 
Greek newspaper. Nov 7 2011 Greek politicians are under international pressure to resolve their differences

Greece's political leaders are still locked in debate over the formation of a unity government they hope can save the country from imminent bankruptcy.

PM George Papandreou is to stand down once the government is formed but his replacement has not yet been named.

The new leadership will be tasked with ratifying a vital EU bailout package.

Greece is under huge international pressure to resolve its political crisis, in order to calm the global markets and protect the eurozone.

An agreement on an interim leader had been expected on Monday but by Tuesday morning, there was still no announcement from the negotiations between Mr Papandreou and opposition leader Antonis Samaras, of the New Democracy party.

An emergency cabinet session chaired by Mr Papandreou on Tuesday ended still without an announcement.

"Today is the last chance for the two main parties," daily newspaper Nea wrote in an editorial on Tuesday.

"They have to come up with a government strong enough to take the country out of the moving sand of political impasse that leaves us defenceless, at the mercy of the crisis. Time is up."

"A national unity government, right now," the daily newspaper Ethnos wrote on its front page, adding: "The country and the society cannot endure any more."

Greece must approve the EU bailout if it is to avoid going bankrupt by the end of the year. But the deal demands stringent austerity measures and spending cuts which have proved hugely unpopular with many Greeks.

Analysis

The waiting game continues in Greece as the name of the next prime minister remains unknown.

Lucas Papademos, a former vice president of the European Central Bank, is the front runner. He helped Greece move from drachma to euro, a process he would hope will not have to be reversed as the debt crisis worsens.

And though the political turmoil is not over, MPs have broadly welcomed the coalition deal. The new government will be faced with a deeply disillusioned population and a crisis which threatens the whole eurozone.

The concern is that Greece's long-term financial prospects remain bleak. But this country is taking things day-by-day for now. It is too hard, perhaps too dangerous, to peer too far into the future.

Mr Papandreou agreed to stand down on Sunday, after days of upheaval caused by his call - now revoked - for a referendum on accepting the bailout.

Since then, he had been trying to build a national unity government to replace his Pasok party administration. However, Mr Samaras was refusing to negotiate unless his rival resigned.

The first steps in forming the new government were finally announced after late-night talks on Sunday between the two men, hosted by President Karolos Papoulias.

A Greek government spokesman said a new administration would be sworn in and a confidence vote held within a week, if all went well.

Greece's new political roadmap envisages elections being held - possibly on 19 February - once the new government has approved an EU bailout package.

Government figures spent Monday locked in discussions on the framework of the interim authority and their roles within it.

Lucas Papademos, a former vice president of the European Central Bank (ECB), is widely seen as the frontrunner to become interim prime minister, while Finance Minister Evangelos Venizelos - for a time considered to be a candidate - is expected to remain at the finance ministry.

The BBC's Mark Lowen in Athens says it is believed Mr Papademos expressed doubts that an interim administration could be effective until proposed elections in February.

It appears he wants to stay in power longer if chosen, he adds.

Our correspondent says there will be immense pressure on whoever takes over, while European leaders will be hoping that person will work with them in trying to contain the country's debt crisis and prevent it from spreading further across the eurozone.

Eurozone finance ministers held talks in Brussels on Monday, adding to the pressure on Greece to find an early solution to the political deadlock.

Mr Venizelos also attended the talks, telling reporters that the move towards a unity government was "proof of our commitment and of our national capacity to implement the programme and to reconstruct our country".

Views of the Greek people: "When there's an uprising, then things will change"

But eurozone finance ministers have asked for written assurances from Mr Papandreou and Mr Samaras that they are committed to passing the rescue package.

Eurozone chief Jean-Claude Juncker said he was "quite confident that now the situation in Greece is developing in the right direction" but that it "should have been done months ago".

The EU says no more of the funds which have been promised to Greece will be released until the new bailout deal has been approved.

Political crisis

The hard-fought bailout deal for Greece agreed by the EU last month gives the government 130bn euros (£111bn; $178bn) and imposes a 50% write-off on private holders of Greek debts, in return for deeply unpopular austerity measures.

But Mr Papandreou faced the wrath of fellow EU leaders when he announced that he would put the deal to the people of Greece in a referendum

What next for Greece?

  • Tuesday: Details of unity government and name of prime minister expected to be announced
  • Within a week: Coalition sworn in and confidence vote held; the new coalition must win parliamentary approval for the EU bailout plan before calling early elections
  • Mid-December: Greece would receive next tranche of bail-out money
  • 19 February: Possible date for early election

The idea was dropped days later, but not without sparking a deeper financial crisis and triggering the political crisis which led to the confidence vote last Friday.

Mr Papandreou narrowly won that vote, but had been under continuing pressure to resign amid chaos over the debt crisis.

The possibility of Greece leaving the euro has also been raised by EU leaders, if Athens fails to resolve its political and financial problems.

There are fears that the crisis could spread to bigger eurozone countries like Italy.

 

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  • rate this
    -1

    Comment number 140.

    @123 - you misunderstand (that's happening to me a lot). I suggested that the Gov't in any given country would want to downplay the debt. While our sensationalist press use the American numbering system, UK & France always used 1 million million to be 1 billion, not the US 1 thousand million. This would sound better in dispatches. I hope I said nothing offensive.

  • rate this
    0

    Comment number 139.

    114. roaminoff
    You said: 'Now I wonder where they could go without any immigration problems and be assured of a decent standard of living ?'
    Wonder no more. They could go to Switzerland or Germany or Norway without any immigration problems and earn decent salaries.

  • rate this
    0

    Comment number 138.

    And the new president is Angela Sakozy?

  • rate this
    +1

    Comment number 137.

    59.

    This should be a lesson to all of us not to believe those politicians who advocate more government spending. Because it is the rest of us, not the politicians, who will have to pay for it, only later.
    ---
    No.
    The lesson is that politicians should be forced to pay for welfare through taxation rather than borrowing.
    We can have social justice without debt.

  • rate this
    0

    Comment number 136.

    Papandreou, came new into power in 2009, had to face a crisis that Europe was not ready for.Because of him the Euro bail out plan was put together.But inside the country he had to fight with the opposition parties which had not been helping (some were).The referendum, which resulted in his personal stepping down, did one good thing: brought together all (except 1) opposition parties!This is good!

  • rate this
    -1

    Comment number 135.

    121.beegee139
    36 Minutes ago
    ...and our salaries did not increase by 100% in a period of 10 years.
    -----
    Our salaries increased by ~ 100% between 1975-80
    ______

    We are also free to set our own fiscal policies because we are not shackled by the Euro.
    -----
    Aye, right.

  • rate this
    -1

    Comment number 134.

    @ beegee139 (132): I do not judge you personally.Over the last 1 1/2 year I read an increasing number of offensive comments for Greeks who may do things wrong, but only to a small proportion to what they are accused of.It's heartbreaking to read these things for your own nation, a proud nation, which gave so much to the world. You'll feel the same when the UK will be under such a financial attack.

  • rate this
    0

    Comment number 133.

    131.Chris London
    4 Minutes ago
    I had the pleasure to be in Athens and a number of the Islands a couple of weeks ago and you know what. Most are continuing as before. Cash is still king and tax is a thing that others pay.
    _____
    Are you of the opinion that further austerity is likely to lead to less tax evasion?

  • rate this
    -1

    Comment number 132.

    128. christina222
    Christina, please don`t get me wrong, I was not judging the Greek people as a whole, just pointing out the differences that apply to our separate economies. Greeks were badly let down by politicians who spent madly just to court popularity and enhance their own ambitions.
    I have visited your country many times over the last 35 years - lovely country & lovely people!

  • rate this
    -1

    Comment number 131.

    47.JPseirakis
    Comment number 47 is an Editors' Pick
    2 Hours ago
    You want to know how things are in Greece right now?

    I had the pleasure to be in Athens and a number of the Islands a couple of weeks ago and you know what. Most are continuing as before. Cash is still king and tax is a thing that others pay. Yes they are angry but it is just because the gravy train has come off the tracks

  • rate this
    +1

    Comment number 130.

    Purely a cosmetic and desperate move without any substance.
    If real solutions are to be found they must be explored and approached on EU wide basis as in reality this is internal EU structural, framework and policy problem rather a problem solely confined to Greece or any other member state.

  • rate this
    +1

    Comment number 129.

    Even a blind man could see what would happen when the politicians juggled the books to make it appear that Greece qualified for the €uro-zone. Now they are reaping the whirlwind.

  • rate this
    0

    Comment number 128.

    @beegee139 (121). I agree with you on some points. Greece needs to change on many things. But do no generalise.In private sector people DO NOT retire at 57 or earn as much money!Yes, the national debt doubled in less than 10 years.That's the mess the previous government left us with and the current tries to sort out! But its bad to judge a country with a huge history for the mistakes of 10 years!

  • rate this
    0

    Comment number 127.

    "116. M Brady-Alygizaki

    I`m an English woman married to a Greek contract council worker that has n`t been paid for 10 months !!! (as many others), our savings are running out. "

    EUpris We should be helping people like you directly and not giving money to the Greek government.

    I hate the "EU"-Dictatorship-WasteMachine. I don't hate the Greeks.

  • rate this
    0

    Comment number 126.

    This could so easily be us!! We have the same top-heavy public sector, over indulgent benefits system and extremely rich not paying in enough. Our saving grace? That we aren't in the Euro so we can manage our own financial affairs [or not] without Germany/France holding us to ransom to bail out their financial institutions. Everybody made hay while the sun shone on Euroland, not just Greece.

  • rate this
    0

    Comment number 125.

    Neither a change in government nor a bail-out will resolve this crisis. If the EU wants to help out, they should start thinking about defining new systems that allow us to live in a real European union. Our financial system has failed. We need to accept it.

  • rate this
    0

    Comment number 124.

    Behind the rhetoric the EU (and Euro) is a Capitalist system driven by the French and Germans to sell more 'Autos' and make money for the banks. Similarly the thrust of home-ownership and all derivatives set up in the UK is a system set up to make money for the banks. It is inevitable that both will fail, at least in part. If lesser sums were involved we'd be calling them 'loan sharks'.

  • rate this
    -1

    Comment number 123.

    @teedoff (111): All I'm trying to say is that ALL countries have a huge National debt. Its easy to point the finger to the "usual suspect". People of ALL counties may do things wrong.BUT, it is a system, used by ALL western countries that is bringing us ALL down.Greece is just the start. So, please, do not talk offensively for people, who have a long history, for problems that ALL countries have!

  • rate this
    -1

    Comment number 122.

    When all is said and done, lets wish the new government and the Greek people good luck. If they learn from their past mistakes they will accept that for many years to come life is going to be hard, assuming they stay in the eurozone. If they decide to leave, I think, life for ordinary Greeks will be harder still, at best, dominated by very serious political and social upheaval at worst

  • rate this
    +4

    Comment number 121.

    109. Christina222
    Yes the UK has a large public debt but we have a relatively efficient tax regime, have austerity provisions in position, we don`t retire at 57 on an 83% pension and our salaries did not increase by 100% in a period of 10 years. We are also free to set our own fiscal policies because we are not shackled by the Euro.

 

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