The Press and Journal (Aberdeen and Aberdeenshire)
Back to the polls as coalition bid fails
Greece: Nine days of government talks collapse
Greece faces another election within weeks after nine days of talks to form a “unity” government finally collapsed.
The prospect became inevitable after Greek sociali st l eader Evangelos Venizelos emerged from the latest failed meeting of political leaders to concede no compromises on a workable administration were possible.
The outcome did nothing to steady jittery markets, not least because another election is almost certain to deliver an even more decisive protest vote against severe austerity measures which have hit jobs and incomes and delivered little sign of economic recovery.
The European Commission maintained that any Greek administration, whatever its election mandate, would be expected to
“A time of considerable uncertainty in the eurozone”
honourthe national austerity policy agreed as part of multibillion- pound EUIMF bailout packages to keep Greece afloat.
The failure of the Greek political factions to settle their differences in the interests of stability came as the newly-installed French President Francois Hollande was in Berlin arguing that the German-led austerity strategy was too rigid and must be balanced with effective growth initiatives.
At the same time, EU finance ministers in Brussels agreed new rules on bank liquidity as a hedge against further economic shocks to the banking system, but could do little else but hope for a Greek breakthrough in Athens.
Before talks finally broke down, UK Chancellor George Osborne said: “This is a time of considerable uncertainty in the eurozone economies and that uncertainty is undermining the entire European recovery and I think we are reaching a point where we have got to make a decision to see the eurozone stand behind their currency.
“A very important part of that of course is strengthening the entire European
banking system.”
Prime Minister David Cameron’s official spokesman said Britain wanted to see “decisive action” to end uncertainty in the eurozone, but declined to discuss if Greece should be offered a deal to allow it to stay in the single currency.
He said: “One of the things fuelling uncertainty are thegreekelections, and political uncertainty can add to economic uncertainty. What we have been saying for the past year is that we require some decisive action across anumber of fronts – resolving the uncertainty about Greece, strengthening the banks, making sure there is a ringfence in place for the eurozone and a well-resourced bailout fund, and then tackling those deeper structural problems to improve Europe’s competitiveness.”
Official figures have suggested that, unlike Britain, the eurozone and the Euas a whole avoided recession in the first three months of this year.
Shadow chancellor Ed Balls said: “With Germany, France and the eurozone as a whole avoiding recession, it’s now clear that Britain’s double-dip recession was made by in Downing Street by David Cameron and George Osborne’s failed economic policies.”
In Berlin last night, German chancellor Angela Merkel and French president Francois Hollande said they had agreed to discuss ways to generate economic growth in Europe and confirmed they both want Greece to remain part of the eurozone.
Mr Hol l a n d e also pledged to work with Germany “for the good of Europe” to promote growth.