FT - Greek opposition refuses to join coalition

Discussion in 'Wall St. News' started by THE-BEAKER, Nov 5, 2011.


    George Papandreou’s chances of putting together a strong coalition government that could persuade international lenders to unblock fresh funding for Greece have faded after the conservative leader bluntly rejected his proposal.

    Antonis Samaras said on Saturday his New Democracy party would not join a new government that would lack a clear mandate. He repeated his call for immediate elections.

    Analysts said that without the support of Greece’s largest opposition party, Mr Papandreou would be unable to secure the disbursement of a desperately needed €8bn loan tranche, exposing the country to the risk of a disorderly default by the middle of December. Herman Van Rompuy, the EU president, has called for both main political parties to back the new programme as a precondition for any funding to be disbursed.

    “Europe is running out of patience … it’s clear that if we don’t reach a deal very soon with the conservatives, our financing lines will be cut,” said a senior member of Mr Papandreou’s PanHellenic Socialist Movement (Pasok).

    Mr Papandreou won a vote of confidence in parliament on Friday night after all 153 socialist lawmakers backed his pledge to build a coalition that would swiftly approve a new €130bn bail-out agreed by European leaders, thereby securing inflows of more than €80bn by next March.

    That amount would include €30bn to recapitalise struggling Greek banks, €30bn to support fiscal adjustment and €20bn for bond swaps under a scheme for investors to take a 50 per cent “haircut” on their holdings of Greek debt, he said.

    Mr Papandreou said after a meeting with President Carolos Papoulias on Saturday that talks with other political leaders on “forming a broad consensus …. with the basic aim of approving the latest package” would start soon.

    Mr Samaras said the conservatives were ready to back the second bail-out programme but only after an election, which he said could be held by mid-December: ”No economic adjustment programme can succeed if it doesn’t have the people’s support,”

    The leaders of two small conservative parties, Laos and Democratic Alliance, said they would not join a coalition unless Mr Samaras’s party had already agreed to participate.

    Greece’s two leftwing parties also turned down Mr Papandreou’s proposal. Alexis Tsipras, head of the radical Syriza party called for immediate elections. The communist leader Aleka Paparriga said her party would not be “blackmailed” into supporting a coalition.

    Two opinion polls published in Athens newspapers on Saturday showed more popular support for a coalition government than for a snap election.

    According to a poll in Proto Thema, about 52 per cent of Greeks would prefer a consensus arrangement to govern until early next year, compared to 36 per cent in favour of holding elections by December.

    Another poll published by Ethnos showed 45 per cent support for a coalition and 42 per cent for a snap election.

  2. Guess ball is in Pap's court now. Step down tomorrow highly likely. if not - "flush"