ATHENS – With elections looming on May 6, interim Prime Minister Lucas Papademos’ shaky hybrid government of PASOK Socialists and their bitter rival New Democracy Conservatives, who are jockeying for positions, is beginning to break down into petty squabbling, forcing the former European Central Bank (ECB) Vice-President to warn them to stop trying to scuttle reforms to which they had agreed to keep international aid coming. Greece, which is surviving on a first series of $152 billion in rescue loans, is set to begin receiving a second bailout of $172 billion from the Troika of the European Union-International Monetary Fund-ECB, but only on the condition that the government impose more austerity measures, speed up privatization and open closed professions that enjoy a monopoly.
Both PASOK’s new leader Evangelos Venizelos, the former Finance Minister, under Papademos, imposed brutal tax hikes and pay cuts on Greeks and has been trying to explain to the electorate why he did, and New Democracy leader Antonis Samaras, agreed to the pay cuts, tax hikes, slashed pensions, and the coming firing of 150,000 workers over the next three years, along with cutting the minimum wage 22-32 percent and the phasing out of collective bargaining, along with more pension cuts.
Now, however, both party leaders are trying to rearrange their former positions, with Samaras saying he opposes the austerity he supported before he opposed it under former Prime Minister George Papandreou, who gave up the leadership of PASOK to Venizelos. Papademos, a low-keyed technocrat, is said to be running out of patience with the party leaders. With polls showing New Democracy leading with only 20 percent of the vote and PASOK lagging, and the rise of new anti-bailout parties that could put eight parties in the 300-member Parliament, another coalition government seems imminent although New Democracy and PASOK, who’d likely have to be partners, are feuding. Some analysts said that could undermine the bailouts and put Greece back on the path to ruin that was set in motion by both parties who alternated ruling over the previous 35 years.
Sources told the newspaper Kathimerini that Papademos is frustrated that key legislation, such as the bill liberalizing the taxi sector, is being used as a vehicle for parties to appeal to their constituents. The Troika said that is the pattern that created Greece’s economic crisis, as both parties took turns hiring hundreds of thousands of unneeded workers for generations to get votes and keep power. Papademos is also reportedly anxious that a number of ministers are focusing less on their job and more on campaigning for their parties as Greece moves closer to the general elections. Papademos is not used to the rough-and-tumble of Greek politics and prefers a softer approach to the rough business.
Government spokesmen Pantelis Kapsis said that Papademos is reminding them that they need to focus on completing the legislative work that Greece has agreed to carry out before the elections as part of its loan agreements. “It is the prime minister’s decision that this government should continue working right up to the last day and we are all trying to achieve this,” he said.
“We want to hand over the ministries and the public sector (to the next government) in the best possible state,” added Kapsis. “There is no room for petty party political moves.” That, however, is all that seems to be happening now as party rivals are trying to out-do each other in a bid to recapture voters who are fleeing to other parties.
Samaras is so desperate and fearful of losing support to the new Independent Greeks party, that was formed from New Democracy deputies he kicked out for refusing to go along with the austerity they had previously been told to oppose, that he’s invited many of them back, and a half dozen are set to return, but they first have to write him a letter before being readmitted.
With all the bickering, Kapsis admitted that some legislation, which the terms of the new bailout do not require to be submitted before elections, would be set aside for the next government to handle, including legislation on the reform of the public administration and tackling youth unemployment. The current government, however, is expected to act on a bill requiring Greece to set up an escrow account into which all the revenues needed to repay the loans must go first before any other monies are spent.
The European Commission’s Finance Minister, Olli Rehn, sounded an ominous warning as well that Greece can’t let up now that the second bailout has been agreed upon. “The current pace of reform and adjustment are far from sufficient to make Greece’s public finances sustainable or to close the competitiveness gap … further efforts are therefore necessary.” He also said Greece has failed to get any significant revenues from tax evaders costing the country more than $72 billion as both PASOK and New Democracy in the past have shied away from going after them. Rehn also said Greece has to stop blaming those trying to help the country, be serious about reform and have political unity, something which has never happened in the country.
Matthias Mors, head of a team of experts from the Troika, told the daily Sueddeutsche Zeitung in an interview on March 29 that, “Greece is not out of the woods yet,” and can’t rely on the bailouts without changing its culture. “There are still many measures to be taken, painful ones too. I believe we’ll be able to see in the second half of the year in which direction we’re going, whether we’re on the right path or not,” Mors said.
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