ATHENS – Following remarks from New Democracy party leader Antonis Samaras that elections tentatively scheduled for Feb. 19 will probably have to be rescheduled because a temporary coalition government won’t be able to finish the work of keeping international loans coming before then.
A prominent PASOK Socialist lawmaker and former government spokesman, Ilias Mossialos said the administration should stay in power for two more years. Mossialos was the face of PASOK during its two-year run before former Prime Minister George Papandreou resigned Nov.
11 after social unrest caused by deep pay cuts, tax hikes, slashed pensions and scores of thousands of layoffs required by the Troika of the European Union-International Monetary Fund-European Central Bank as a condition of getting a $152 billion bailout and a proposed second rescue package of $175 billion.
He told SKAI TV that the country still has too many obstacles to overcome and that the fractious coalition led by former banker Lucas Papademos as interim Prime Minister, and compromised of PASOK minister holdovers as well as New Democracy conservatives and the far Right-Wing LAOS party needs more time. That recommendation came as the Parliament the coalition controls easily pushed through a 2012 budget that calls for more austerity measures.
Mossialos noted that elections were scheduled for 2013 anyway and that even PASOK’s rivals in New Democracy acknowledge now that the timetable is too tight, although Samaras has ambitions to be Prime Minister and agreed to the coalition in return for snap elections. The coalition government that Papademos was appointed to lead was originally expected to play a transitional role – ensuring that Greece secures crucial rescue funding and finalizes a new debt plan with its creditors – before early elections are held.
Meanwhile, Greece got good news that a long-delayed $11 billion loan installment from the first bailout will be released on Dec. 15, just in time to keep paying workers, pensioners and a drastically-reduced Christmas bonus that retailers are counting on to prevent more of them failing, even as more than 100,000 have closed because of a deep recession caused by austerity, which has also created 18.4 unemployment.
IMF chief Christine Lagarde said the money would be forthcoming and congratulated Greek leaders for what she called their “substantial achievements” so far. But she noted that an ongoing austerity drive aimed at reducing a huge budget deficit was “in a difficult phase, with structural reforms proceeding slowly, the economy weak, and the external environment deteriorating.” She called for a “prompt implementation of underlying fiscal reforms which are necessary to downsize the public sector and strengthen tax collection.”
The 2012 budget sees more spending cuts and vows of yet another crackdown on tax evaders costing the country $60 billion. There has been a spate of public arrests of some businesspeople, but the government still refuses to release a list of tax evaders. Approval of the budget was critical, however, as European Union leaders will hold a crucial meeting in Brussels on Dec. 9 to talk about the fate of the Eurozone, the 17 countries – including Greece – who use the euro as a currency. Greece’s economic crisis has weakened the Eurozone and EU leaders are struggling to find a monetary mechanism to keep it from collapsing.
Addressing Parliament before the vote, Papademos said the budget was “difficult” but said it was crucial to “restore our international credibility” and “lay the foundations for economic recovery.” He added: “History will not forgive us if we give up the fight for our future.” He said that the implementation of the budget required “not only the support of the coalition government but of society at large.” Papademos said he hopes the budget approval will lead the Troika to approve the second bailout that also allows Greece to write down 50 percent of much of its debt, although some banks and private investors are balking.
Finance Minister Evangelos Venizelos said the budget is “a tool for exiting the crisis,” as it foresees some $6.69 billion in spending cuts and projects a $4.8 billion increase in tax revenues, although the figures for 2011 are far short of similar projections. He said the government wants to create a surplus of 1.1 percent of Gross Domestic Product (GDP) next year, a number many analysts said is impossible to attain.
Even as some 14.000 workers are scheduled to be put into a labor reserve pool at 60 percent pay and likely to be fired in a year, the coalition government said another 19,000 will be pushed into early retirement, the newspaper Kathimerini reported. They are all on open-ended contracts and employed in ministries, state-backed bodies and other parts of the broader civil service. Of the 19,000, around 12,000 are close to retirement – having completed 33 years of service – and another 7,000 are employed in state bodies which are slated for closure or merging with other organizations.