ATHENS – Moving swiftly to distance itself from one of its appointees who resigned, the Administration of Greece’s new Prime Minister Antonis Samaras said that former Deputy Labor Minister Nikos Nikolopoulos, who quit because he said the government had reneged on its promise to renegotiate conditions of tough austerity measures demanded by international lenders, was not up to the job.
Nikolopoulos had complained that Samaras was weak in backtracking on promises to get tough with the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is lending Greece $153 billion in rescue loans and readying a second bailout of $173 billion. The money comes with conditions of big pay cuts, tax hikes, slashed pensions and other reforms that have worsened a five-year recession and created 22.7 percent unemployment, which Nikolopoulos said was intolerable. He wanted Samaras to insist on changes to reforms affecting the jobless, but Samaras backed off.
Greek channel NET TV quoted Nikolopoulos as saying: “The sole reason of my resignation is my personal conviction that the issue of renegotiating with the Troika, as well as the correction of significant distortions in labor, pension, social security and welfare issues, should have been emphatically put on the table from the start.” He handed in his resignation – the third Minister to quit the brief coalition government of Samaras’ New Democracy Conservatives, PASOK Socialists and the Democratic Left – hours after the government easily won, as expected, a vote of confidence from the Parliament it controls.
Government spokesman Simos Kedikoglou said the government was puzzled. “There is no logical explanation. Mr. Nikolopoulos had no time to argue with his minister. And negotiations with the Troika haven’t even started,” Kedikoglou said. “He backed the government in a vote of confidence. In the end, not everyone is cut out for tough jobs.”
The newspaper Kathimerini suggested that Samaras was angry over the departure, as reflected in the harsh denunciation of the man he appointed. The paper said that Nikolopoulos, a New Democracy Member of Parliament since 1989, is likely to have left because he had expected to be appointed Labor Minister, not Deputy, and did not want to serve under the department’s head, Yiannis Vroutsis. There were also suggestions he was worried by the hard line taken by the Troika on labor issues and reports linking him to an attempt to interfere with a financial probe.
Whatever the reason, the departure was an embarrassment to the government and followed close on the heels of two recent resignations. One, that of Samaras’ first choice to be Finance Minister, former Bank of Greece President Vassilis Rapanos, who took ill and was said to be unhappy that the Cabinet was top-heavy with political retreads and too few technocrats, and two, Deputy Merchant Marine Minister Giorgos Vernikos, who was linked to an offshore company in violation of Parliament rules. Nikolopoulos was considered a close ally of Samaras, who named U.S.-trained economist Nikos Panagiotopoulos to replace him.
CRACKS IN THE COALITION
Analysts said the resignation showed deeper rifts developing in the government to go along with those with PASOK leader Evangelos Venizelos and Democratic Left leader Fotis Kouvelis, who barred any of their members from serving in the Cabinet. Samaras’ pledge to take a hard line took a back seat with the realization that the Troika could shut off the money pipeline and withhold a 31 billion euros ($38 billion) loan installment at the end of August. Without the money, Greece will be unable to pay its workers or pensioners, and long ago stopped paying its bills as it is now almost totally dependent on welfare aid from the Troika, with its tax revenues still weak despite big tax increases.
“It is an indication that the government will face internal problems between groups pushing for a ‘hard’ and ‘soft’ stance towards the Troika and the terms of the bailout,” Theodore Couloumbis, political analyst at Athens-based think-tank ELIAMEP, told Reuters. That became more evident when the respected think tank, the Foundation for Economic and Industrial Research (IOBE) – founded by new Finance Minister Yiannis Stournaras – showed the economy will contract 6.9 percent this year, far worse than expected, giving the government little wiggle room to do anything but bend to more demands unless Samaras can convince the Troika that the austerity measures are killing the economy, not helping it.
A statement issued by main opposition Radical Left Coalition (SYRIZA), which finished a close second to New Democracy in the June 17 elections under an anti-austerity banner, said that the rest of the Cabinet should quit to show solidarity against what it called Samaras’ retreat. SYRIZA leader Alexis Tsipras mocked Samaras and said the new Prime Minister abandoned his renegotiation pledge – borrowed from Tsipras – the moment he was elected.
Independent Greeks spokesman Christos Zois characterized Nikolopoulos’ resignation as “incomprehensive,” considering that it took place after the government received a vote of confidence and called on him to reveal what the Troika demanded from the Labour Ministry and what Samaras agreed to do. The Troika said the new government must make another $15 billion in cuts.
The pay cuts, tax hikes and slashed pensions insisted upon by the Troika have worsened a recession now in its fifth year, created 22.6 percent, is shrinking the economy by 6.9 percent and closing 1,000 businesses a week. Nikolopoulos said those numbers were intolerable and that Greece needed to be more adamant in resisting measures that were hurting the economy, not helping it.
(Sources: Kathimerini, Reuters, AMNA)