Coalition sought after Greek vote
Source: Agencies |
June 19, 2012, Tuesday
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Greece's conservative leader pushed yesterday for a new coalition government after a narrow election victory, pledging to soften the debt-laden country's punishing austerity program despite opposition from Germany.
A brief relief rally on international financial markets after Sunday's Greek vote quickly fizzled out as it became clear that Antonis Samaras's New Democracy had failed to win a convincing popular mandate to implement the deep spending cuts and tax increases demanded by the European Union and the IMF.
Radical left-wing bloc SYRIZA and a host of smaller parties opposed to the punishing conditions attached to the 130 billion euro (US$164.12 billion) bailout won around half the votes cast, though fewer seats because the electoral system rewards the first placed party disproportionately.
Samaras received a mandate to form a coalition government from the president yesterday, but talks looked set to run into at least today. He said the country would meet its commitments under a bailout saving the country from bankruptcy and a dramatic exit from the eurozone.
But Samaras added: "We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships."
Samaras met with SYRIZA's charismatic leader Alexis Tsipras, who ruled out joining the government, and with the third-placed PASOK Socialists, who did not commit. PASOK leader Evangelos Venizelos said negotiations "must be wrapped up" today.
The small Democratic Left party indicated it would be ready to support Samaras if the bailout deal could be softened.
Greece's economy is forecast to contract 5 percent this year after shrinking 7 percent last year. Protests regularly choke the center of Athens, some hospitals are running short of medicines, thousands of businesses have closed and beggars and rough sleepers are multiplying.
During the election campaign, Samaras called for cuts in taxes, hikes in unemployment benefits, pension rises and two more years to meet fiscal targets.
But Germany, already irritated at what it sees as the slow pace of Greek reform, ruled out more than minor delays to some targets in the rescue package - Greece's second since 2010.
Chancellor Angela Merkel, speaking at a meeting of G20 leaders in Mexico, said any loosening of Greece's agreed reform pledges would be unacceptable and reiterated that Athens had to stick to the commitments it had already made.
German Foreign Minister Guido Westerwelle said the substance of the bailout agreement was "not negotiable," but he said creditors might be willing to offer some flexibility on timing for some of the targets, given the time lost in campaigning.
"We're ready to talk about the time frame as we can't ignore the lost weeks, and we don't want people to suffer because of that," he told German radio yesterday.
A brief relief rally on international financial markets after Sunday's Greek vote quickly fizzled out as it became clear that Antonis Samaras's New Democracy had failed to win a convincing popular mandate to implement the deep spending cuts and tax increases demanded by the European Union and the IMF.
Radical left-wing bloc SYRIZA and a host of smaller parties opposed to the punishing conditions attached to the 130 billion euro (US$164.12 billion) bailout won around half the votes cast, though fewer seats because the electoral system rewards the first placed party disproportionately.
Samaras received a mandate to form a coalition government from the president yesterday, but talks looked set to run into at least today. He said the country would meet its commitments under a bailout saving the country from bankruptcy and a dramatic exit from the eurozone.
But Samaras added: "We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships."
Samaras met with SYRIZA's charismatic leader Alexis Tsipras, who ruled out joining the government, and with the third-placed PASOK Socialists, who did not commit. PASOK leader Evangelos Venizelos said negotiations "must be wrapped up" today.
The small Democratic Left party indicated it would be ready to support Samaras if the bailout deal could be softened.
Greece's economy is forecast to contract 5 percent this year after shrinking 7 percent last year. Protests regularly choke the center of Athens, some hospitals are running short of medicines, thousands of businesses have closed and beggars and rough sleepers are multiplying.
During the election campaign, Samaras called for cuts in taxes, hikes in unemployment benefits, pension rises and two more years to meet fiscal targets.
But Germany, already irritated at what it sees as the slow pace of Greek reform, ruled out more than minor delays to some targets in the rescue package - Greece's second since 2010.
Chancellor Angela Merkel, speaking at a meeting of G20 leaders in Mexico, said any loosening of Greece's agreed reform pledges would be unacceptable and reiterated that Athens had to stick to the commitments it had already made.
German Foreign Minister Guido Westerwelle said the substance of the bailout agreement was "not negotiable," but he said creditors might be willing to offer some flexibility on timing for some of the targets, given the time lost in campaigning.
"We're ready to talk about the time frame as we can't ignore the lost weeks, and we don't want people to suffer because of that," he told German radio yesterday.
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