Greece: Newly formed party re­ceives man­date to form gov't

The Pak Banker - - 6BUSINESS -

A new anti- aus­ter­ity party formed by rebel law­mak­ers who quit the gov­ern­ing left-wing Syriza was given its chance Mon­day to seek gov­ern­ment coali­tion part­ners and pre­vent Greece from hold­ing its third na­tional vote this year, although chances of avert­ing the elec­tion are vir­tu­ally nil.

For­mer Energy Min­is­ter Pana­gi­o­tis Lafaza­nis, who heads the newly formed Pop­u­lar Unity, re­ceived the max­i­mum three-day man­date from the coun­try's pres­i­dent af­ter the head of the main op­po­si­tion con­ser­va­tive New Democ­racy failed to form a gov­ern­ment.

Nei­ther of the two par­ties was ex­pected to find will­ing coali­tion part­ners, and early elec­tions are prac- tically guar­an­teed in Septem­ber fol­low­ing the res­ig­na­tion of Prime Min­is­ter Alexis Tsipras last week, seven months into his four-year term. The most likely date is seen as Sept. 20. The re­newed po­lit­i­cal un­cer­tainty has ham­mered the Athens Stock Ex­change. Dragged down by global jit­ters af­ter China's mar­ket tum­bled, the Athens gen­eral in­dex closed down 10.5 per­cent, fol­low­ing two straight days of losses last week over elec­tion con­cerns.

Tsipras re­signed on Thurs­day fol­low­ing a re­bel­lion in his party over Greece's new bailout, which saw dozens of Syriza law­mak­ers dis­sent when the deal came to a vote in Par­lia­ment.

Syriza hard­lin­ers blasted the party's young leader for reneg­ing on the prom­ises which brought him to power in Jan­uary elec­tions to re­peal aus­ter­ity mea­sures im­posed in re­turn for Greece's two pre­vi­ous in­ter­na­tional bailouts. Al­ready on an elec­tion foot­ing, the new party has be­come one of Tsipras' fiercest crit­ics.

"Some peo­ple think they can hide the con­se­quences of the (bailout agree­ments) from the Greek peo­ple," Lafaza­nis said, com­ment­ing on Tsipras' de­ci­sion to trig­ger elec­tions, as he met with Pres­i­dent Prokopis Pavlopou­los to re­ceive the man­date to form a gov­ern­ment. "This is demo­cratic back­track­ing, if not an un­demo­cratic aber­ra­tion."

De­spite ac­knowl­edg­ing it has no chance of form­ing a gov­ern­ment, Pop­u­lar Unity says it will keep the man­date for the full three days. "We don't have il­lu­sions. An anti-(bailout) gov­ern­ment can­not be formed by this par­lia­ment," Lafaza­nis said. "But we will use this man­date to show that the only thing that works to­ward the in­ter­est of the coun­try and the Greek peo­ple is to have a new anti-(bailout) par­lia­ment."

While some an­a­lysts have voiced con­cerns the elec­tion could de­rail the im­ple­men­ta­tion of bailout mea­sures Greece has signed up to, oth­ers ar­gued it could lead to a more sta­ble gov­ern­ment.

"We be­lieve Mr. Tsipras called for a snap elec­tion now to seek a fresh man­date to im­ple­ment the latest agree­ment with Greece's cred­i­tors," said Alpona Ban­erji, vice pres­i­dent at Moody's rat­ings agency. "Mr. Tsipras' res­ig­na­tion of­fers the prospect of es­tab­lish­ing a more ef­fec­tive gov­ern­ment, per­haps in­volv­ing a more mod- er­ate Syriza party gov­ern­ing alone or in a coali­tion with other proEu­ro­pean par­ties. "Which­ever gov­ern­ment emerges from the elec­tion, the next ad­min­is­tra­tion has lit­tle chance of be­ing less co­he­sive than the present one," Ban­erji said.

Tsipras in­sists he had no choice but to ac­cept the tax hikes and spend­ing cuts de­manded by Euro­pean cred­i­tors in re­turn for Greece's new three­year, 86 bil­lion-euro ($99 bil­lion) bailout, to pre­vent Greece from a po­ten­tially cat­a­strophic de­fault and be­ing forced out of Europe's joint cur­rency.

A war of words erupted be­tween New Democ­racy and Syriza over the week­end when Tsipras re­fused to meet with New Democ­racy leader Evan­ge­los Meimarakis as part of the ex­ploratory man­date.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.