Daily Dispatch

Greek leftists set to force new poll


GREECE’S president yesterday asked politician­s to stand aside and let a government of technocrat­s steer the nation away from bankruptcy, but leftists have already rejected the proposal and look set to force a new election they reckon they can win.

Party leaders, deadlocked since a parliament­ary vote nine days ago, convened at the presidenti­al palace at 2pm but said they had little hope President Karolos Papoulias’s offer would resolve a political crisis that has fuelled speculatio­n Greece’s days in the eurozone are numbered.

The political landscape has been in disarray since an inconclusi­ve election on May 6. This divided parliament between supporters and opponents of EU/IMF bailouts which staved off bankruptcy but piled up wage cuts and tax increases on Greeks, deepening the country’s recession.

If supporters and opponents of the bailout cannot agree on a government, Papoulias will call a new election in June, when Athens must agree to over

billion (about Rr115bn) in extra austerity cuts to stick to targets in the bailout plan.

Jean-claude Juncker, who chairs the group of eurozone finance ministers, on Monday dismissed the prospect of a Greek euro exit as “propaganda”.

Juncker seemed to open the door to some softening of the austerity plan, saying a new government could potentiall­y raise the question of extending deadlines, as long as it was still firmly committed to its targets.

But many senior European politician­s and European Central Bank (ECB) policymake­rs now openly speak about the scenario of a euro exit – until recently a taboo subject – and warn their patience with the Greek political drama is wearing thin.

Dutch Finance Minister Jan Kees de Jager said his government had studied the scenario of a Greek departure from the eurozone although Europe’s policy was to keep the country in the bloc.

Greek newspapers also expressed impatience with the political deadlock.

“We are running out of time to form a government of national salvation which would ensure the country stays in the eurozone and would try to gradually pull it out of the crisis,” conservati­ve daily Eleftheros Typos said.

The bailout’s main opponents – the radical leftist Syriza party, which now leads opinion polls – said they saw the president’s plan for a government of non-partisan experts as nothing but a scheme to impose the austerity demanded by the EU and IMF but already rejected by voters.

“We will attend the meeting. But we are sticking to our position. We don’t want to consent to any kind of bailout policies,” said Syriza spokesman Panos Skourletis.

The prospect of a future Greek government reneging on promises made in return for bailout funds sent European shares sliding and Spanish and Italian bond yields higher on Monday.

The euro slipped to a four-month low against the dollar yesterday morning, although data showing strong economic growth in Germany eased the selling pressure on shares and commoditie­s.

Investors fear a Greek exit from the euro would pile risks on other eurozone economies with debt problems.

A government source in Athens said yesterday the state would repay 430million in bonds that mature on May 15.

Papoulias, 82, named a technocrat prime minister six months ago when Greece’s two biggest parties – the conservati­ves and socialists – joined forces to secure the bailout. But both parties were punished in the election, and those that oppose the bailout now are stronger, angrier and in no mood to compromise.

Socialist leader Evangelos Venizelos, whose party commanded a majority in the outgoing parliament but was reduced to third place behind Syriza, backed the technocrat proposal but expressed doubt it would succeed.

“It’s not normal to have a government by technocrat­s or personalit­ies but when you are in such a crisis, in such a dead end, we have to accept this,” he said on Monday, adding: “Things are very difficult. I’m not optimistic.”

The moderate Democratic Left party, which has enough seats to offer probailout parties a majority but has refused to join a coalition without Syriza, rejected the president’s suggestion.

“I told the president a government by technocrat­s or personalit­ies would suggest the failure of politics, and raised my objection,” party leader Fotis Kouvelis said.

There are powerful incentives for the EU to keep Greece afloat, not least that the ECB and eurozone government­s are major holders of Greek government debt and a hard default could leave them with heavy losses. — Reuters

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