Greece Risks Leaving Eurozone, Says Venizelos

ATHENS – PASOK Socialist leader Evangelos Venizelos said he believes the May 6 elections will not give his party or their bitter rival opponents of the New Democracy Conservatives a mandate, and that the uncertainty is raising the possibility that Greece could yet be forced out of the Eurozone of countries using the euro because it might not be able to stick to reforms demanded by international lenders in return for two bailouts of $325 billion.
“The elections ahead of us have our very existence at stake and should leave Greece standing and stable. Opinion polls are showing that we are heading for a deadlock. We need to go to a national agreement,” he said in an interview on SKAI TV. And, just as New Democracy leader Antonis Samaras has done, Venizelos asked Greeks to give him a mandate to rule even though as Finance Minister he doubled income and property taxes and taxed the poor. “The first place is a necessity for PASOK,” he said.
Venizelos and Samaras are vying to be Prime Minister but New Democracy together have less than 40 percent of the vote, which would not give either enough votes to control the Parliament and rule outright. That means they would either have to continue the shaky temporary hybrid government they share or another election would be called. Recent polls show if they co-operated, they could have a majority in Parliament but Samaras has rejected another coalition.
Both parties support the pay cuts, tax hikes, slashed pensions and planned firing of 150,000 state workers demanded by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is putting up a first round of $152 billion in rescue loans and a second coming package of $173 billion more. The Troika has said any attempt by the winner of the elections to alter the austerity measures would lead to the monies being stopped, making it likely that Greece would have to leave the Eurozone and return to its ancient drachma. Going back to the drachma is a scenario many political analysts said would be an economic catastrophe, worse than the crisis besetting Greeks now and may leave the country unable to pay workers and pensioners or its bills.
The Troika also has said that another 11.6 billion in cuts is required after the elections but Venizelos said he would ask them to give Greece more time to make the cuts or raise an equivalent amount in revenues. He also said there will be no more new taxes behind those he put on Greeks as finance minister nor more pension cuts. He also said he did not believe former PASOK leader George Papandreou’s 2009 campaign promise to give more aid to Greeks because there was plenty of money. After Papandreou was elected, he said he suddenly discovered New Democracy had left Greece broke, leaving him no option but to ask the IMF for help, which Venizelos also said he did not agree with, although he publicly backed Papandreou’s actions. Former Defense Minister Stefanos Manos, who has been elected on the tickets of both parties previously and is running as head of the small political party Drasi, accused PASOK and New Democracy of ruining the country saying, “They should not even get 20 percent between them.”
Greece is in a difficult position as most of the money from the second bailout will have to go to pay back banks. The government has been forced to set up a special escrow account to earmark the money for lenders – not social programs, salaries or pensions – and has been locked out of borrowing money in the private markets because Venizelos imposed a 74 percent loss on investors. Anti-bailout parties have been undercutting support for the ruling parties.
Venizelos has challenged the leaders of other parties to make a commitment they will pay salaries and pensions in June, and said he will ask them that question every day. Greece has been borrowing money to pay back other borrowed money, and the austerity measures have worsened a deep recession, creating 21.8 percent unemployment and closing more than 111,000 businesses. Greek media reports said that interim Prime Minister Lucas Papademos, a former ECB Vice-President, has acknowledged privately to supporters that, the “threat of exiting (the Eurozone) or the punishment of Greece … is real.”