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Economist to Lead Greece, but Cabinet Squabbles Delay Move

November 9, 2011 by Leave a Comment

By late afternoon, Greece seemed to face yet a new set of troubles as Antonis Samaras, the leader of the main opposition party, New Democracy, balked at a demand by Eurogroup, the European Union’s group of finance ministers, that several top Greek leaders give a written commitment to the terms of an expanded bailout hammered out with Europe’s leaders last month.

“There is such a thing as national dignity,” Mr. Samaras said in a statement. “I have repeatedly explained that in order to protect the Greek economy and the euro, the implementation of the Oct. 26 agreement is inevitable.”

He added, “I won’t allow anyone to question the statements I have made.”

His statement came just a few hours after Finance Minister Evangelos Venizelos told a cabinet meeting that five top Greek officials were being asked to sign the letter — a demand made on Monday by the chief of Eurogroup, Jean-Claude Juncker — reaffirming their commitment to Greece’s bailouts deals and economic reforms before the next tranche of aid to Greece would be released.

The demand landed in the middle of byzantine negotiations that dragged on through yet another day. The apparent choice of Mr. Papademos, a former vice president of the European Central Bank, came after more than two days of intense wrangling here and growing fear that Greece’s political class would be unable to stop feuding — and positioning themselves for the next elections — long enough to agree on a unity government.

But even the selection of Mr. Papademos was not completely assured. Early Wednesday morning, several local media outlets reported that there had been discussions about other possible candidates for prime minister, including the Parliament speaker, Filippos Petsalnikos, and a former speaker, Apostolos Kaklamanis.

In the through-the-looking-glass world of Greek politics, the argument was not over who could claim the cabinet positions, but who could avoid taking them, particularly the Finance Ministry.

Prime Minister George A. Papandreou, who will resign when the new government is formed, was repeatedly rebuffed when he offered positions in the new government, reports said, because nobody wanted to be associated with the unpopular measures Greece will be forced to impose to qualify for new loans from Europe.

In particular, Mr. Samaras, who has his eye on the next elections, did not see any reason for his party to participate. But other smaller parties also refused.

Mr. Papademos has also played a role in the delays by demanding the right to appoint some ministers, including the finance minister.

In one of the stranger twists, Mr. Papademos is apparently insisting that the current finance minister, Mr. Venizelos, who will most likely run for prime minister in the next elections, step down. But Mr. Samaras, who would like to run against him, is demanding that he stay, some local news outlets have reported.

Greece’s new administration has a difficult road ahead. Its first job will be to secure the next tranche of aid, which is needed by December, Greek officials say, or the country will be unable to pay its bills.

But it must also secure approval of the loan deal, which requires that Parliament pass a new round of austerity measures, including layoffs of government workers. It also calls for permanent foreign monitoring to ensure that Greece delivers on promised structural changes, a move that many Greeks see as an affront to national sovereignty.

Article source: http://feeds.nytimes.com/click.phdo?i=4438ae44b49ff5ad0690c9edc5e70394

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Greek Leaders Agree on New Government

November 7, 2011 by Leave a Comment

ATHENS — After crisis talks on Sunday night, Prime Minister George Papandreou and his main rival agreed to create a new unity government in Greece that will not be led by Mr. Papandreou, according to a statement released Sunday night by the Greek president, who mediated the talks.

Mr. Papandreou and the opposition leader Antonis Samaras agreed to meet again on Monday to hammer out the details. The name of the new prime minister is not expected until then.

The new government is intended to govern for several months to put in place a debt agreement with the European Union, a step European leaders consider crucial to shoring up the euro. Then it is to hold a general election and dissolve.

 Mr. Papandreou has faced mounting pressure to resign, including from within his own party, the Socialists.

Before the meeting with the president, Mr. Samaras said he would enter talks on a unity government only if Mr. Papandreou resigned. Mr. Papandreou himself had repeatedly said that he would be willing to step aside for the deal to go through.

But after meeting with his cabinet in the afternoon, Mr. Papandreou said Mr. Samaras would first have to agree to a seven-point plan of priorities that would essentially commit the new government to the terms of the debt deal. The priorities include securing the release of European rescue funds, meeting fiscal targets imposed by foreign creditors, and passing the 2012 budget by the end of the year.

Mr. Samaras’s conservative New Democracy party has in the past voted against many of the unpopular austerity measures Europe has demanded in exchange for its help, leaving the Socialist government to shoulder the political burden alone.

Mr. Papandreou also insisted that the two sides agree on the composition of a unity government before he steps down.

“It’s clear this government is prepared to hand over the baton, but it can’t hand it over into a vacuum,” he said, according to a transcript of the cabinet meeting that was released to the news media. “It will hand over to the next government, if we agree and decide on it.”

It was not clear on Sunday night whether the opposition had agreed to the sevenpoints during the meeting with President Karolos Papoulias; nor was it clear when Mr. Papandreou would step down. Discussion of the composition of the unity government was left for Monday.

In one scenario discussed in the Greek media on Sunday, Mr. Papandreou might cede power to a unity govermnet including politicians from the Socialist and New Democracy parties but led by a nonpolitical figure. One name being mentioned as a possible leader for such a government is Lukas Papademos, a former vice president of the European Central Bank.

That scenario could set the stage for a power battle between Mr. Papademos and the current finance minister, Evangelos Venizelos, who has reportedly been trying to rally support for a government that he could lead.

Mr. Papandreou survived a crucial confidence vote in Parliament in the early hours of Saturday, a vote seen as an endorsement for the debt agreement with the European Union, but which was predicated on the expectation that he would immediately resign.

His failure to do so appeared to leave Greek politically deadlocked, with the opposition calling for early elections and the government insisting that holding elections now would be too destabilizing.

European leaders want the Greek Parliament to pass the new debt deal worked out in Brussels on Oct. 26. They have urged Greek leaders to forge a broader consensus, since the governing Socialist party did not seem to be able to unify and pass the law on its own.

The deal calls for banks that hold some Greek debt to write down 50 percent of its face value, to help reduce the country’s public indebtedness to 120 percent of its gross domestic product by 2020. But the deal also requires the Greek government to adopt a series of deeply unpopular austerity measures, and it imposes a permanent foreign monitoring presence, a development that many Greeks see as a loss of sovereignty.

In an effort to allow Greeks to have their say, and to strongarm Mr. Samaras into backing the debt deal, Mr. Papandreou proposed a popular referendum on the agreement last week. After the referendum idea drew the ire of European leaders and threw international markets into turmoil, Mr. Papandreou withdrew it.

Though the about-face may have appeared to be a defeat for Mr. Papandreou, he won support for the debt deal from the opposition.

Opinion polls published in Greek newspapers on Sunday drew different conclusions about whether Greeks preferred a national unity government or immediate elections.

A poll for the centrist weekly Proto Thema found that 52 percent of Greeks favored a unity government that would rule for several months and be chosen by Mr. Papandreou, while 36 percent preferred immediate elections to choose a new government, as proposed by the New Democracy party.

Another poll, for the center-left Ethnos newspaper, found less difference in support for the two scenarios, with 45 percent supporting a unity government and 42 percent backing snap elections.

A third survey, for the center-right Kathimerini, found that 66 percent of Greeks supported early elections, but in that poll the alternative choice offered was not a unity government, it was a referendum, which only 14 percent of respondents supported.

Article source: http://feeds.nytimes.com/click.phdo?i=356efc7e56412228c8f7a1fe7ed37e11

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Greek Leaders Fail to Reach Consensus on Austerity Measures

May 27, 2011 by Leave a Comment

But Prime Minister George Papandreou, speaking to the nation in a televised speech, said there was still hope that an agreement would be reached.

“Essentially, there are many points on which we can agree,” he said. “But there is a need for political will from all sides.” “Over the next few days we will continue efforts to reach a consensus,” he continued, adding that “the government has assumed the responsibility to extract the country from the crisis and will do this with or without consensus.”

The aim of Friday’s meeting was to convince officials of the European Union and International Monetary Fund that Greece had the political will to impose more tax increases and spending cuts on a public already weary after a year of belt-tightening.

The effort came amid mounting speculation about the Greek government’s ability to avert a default, which would very likely lead to a new financial crisis across the euro zone.

Olli Rehn, the E.U.’s commissioner for economic and monetary affairs, said in a statement that the commission “regrets the failure of Greek party leaders to reach consensus on economic adjustment to overcome the current debt crisis.”

“An agreement has to be found soon,” Mr. Rehn said. “Time is running out.”

Earlier in the day, leaders of the opposition in Greece had refused to fall in behind the president, Karolos Papoulias. Antonis Samaras, the leader of the country’s main conservative opposition party, New Democracy, said he would not back a program that would “raze Greece’s economy and destroy its society.”

He called for the renegotiation of the terms of an agreement with the Union and the I.M.F., which last May pledged ¤110 billion in loans to Greece in exchange for the country’s getting its fiscal house in order.

Mr. Samaras also reiterated calls for an alternative approach to Greece’s finances, one that favored the lowering of taxes and faster privatization of state assets.

On Thursday, the head of the group of euro zone finance ministers, Jean-Claude Juncker, said again that the E.U. would be unlikely to step in if the I.M.F. withheld its portion of a fifth installment of emergency funding to Greece — ¤12 billion, or $17 billion, scheduled to be disbursed next month.

Greece’s lenders are demanding additional measures after the country missed its deficit-reduction target for 2010, putting the goals for this year and beyond further out of reach. A mission from the European Commission, the I.M.F. and the European Central Bank is currently compiling a much-anticipated report on the Greek government’s progress, after which European ministers will have to decide how to react.

The situation is difficult because public opinion in creditor countries is hardening and some euro zone governments, including that of the Netherlands, have made it clear that they will not step in and fill the funding gap if the I.M.F does not believe that it can justify releasing its portion. That has increased pressure on the Greek government to agree to revenue raising measures, including on privatization, that will be sufficient to win over the I.M.F.

At the Group of Eight meeting in Deauville, France, on Friday, the United States expressed support for European efforts to prevent a renewed debt crisis in Greece from mushrooming into a larger problem for the euro monetary union, said two European diplomats who were present during the discussions but did not want to be named.

The Americans said that Europe’s ability to manage these problems was important to the United States, but that President Barack Obama did not specify what kind of help the United States would be willing to extend, other than statements of support, the diplomats said.

The European leaders said during the discussions that Europe’s problems were limited to Greece and that they did not believe Greece risked infecting the rest of the euro zone, which covers 17 countries. They pointed to the continued strength of the euro vis-à-vis the dollar as proof that the situation was still under control.

The leaders agreed, however, that Greece needed to be more aggressive in adjusting its own finances, and said they believed that the country would ultimately be able to avoid defaulting on or restructuring its debts.

Greek media has speculated in the past week that the country would hold snap elections or possibly return to the drachma. The E.U. marine affairs commissioner, Maria Damanaki, who is a Greek Socialist, added fuel to the fire when she suggested on Wednesday that talks are already taking place about Greece’s possible exit from the euro zone.

Apart from tax increases and public spending cuts, the Greek government’s proposed austerity program also includes a privatization drive that foresees sales in stakes of state utilities and assets including the state telecommunications company OTE.

On Friday, Deutsche Telekom, which already has a 30 percent stake in OTE, confirmed the receipt of a letter from the Greek finance ministry asking to arrange talks to discuss increasing its stake.

A few dozen employees of the phone company protested a further sell-off by blocking one of Athens’s busiest roads, in front of the company’s headquarters, during the morning rush hour Friday.

Larger protests have been held over the past three days as Greeks, facing a deepening recession and mounting unemployment, seek to air their grievances.

Kevin J. O’Brien in Berlin, Stephen Castle in Brussels and Liz Alderman in Deauville, France, contributed reporting.

Article source: http://www.nytimes.com/2011/05/28/business/global/28euro.html?partner=rss&emc=rss

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