THE EU authorities pressed Greek leaders to back the country’s second bailout but a spate of government defections means technocrat Greek prime minister Lucas Papademos will be unable to meet all conditions set by his European sponsors.
Leader of the far-right Laos party George Karatzaferis declared yesterday he could not vote for the new rescue package and three of his ministers resigned from the coalition government.
Late last night the Greek cabinet approved a draft bill spelling out reforms required by the EU and the IMF taking Athens closer to getting a new €130 billion bailout after the prime minister warned the alternative was “catastrophe”.
Although two Laos ministers indicated they would vote for the new bailout, the stance Mr Karatzaferis adopted is in defiance of the demands set by euro zone finance ministers.
His party is the junior coalition partner alongside the socialist Pasok and centre-right New Democracy, but the finance ministers have sought written pledges to implement the bailout from all three parties.
A spokesman for EU economics commissioner Olli Rehn reiterated that demand not long before Mr Karatzaferis made his intentions known.
“The euro group wants clear and strong political assurances from the leaders of the parties which form that national unity government – three parties, as you know,” he said.
“It has to be bold and it has to be clear and unequivocal, in writing, so [as] to be sure that there will be proper implementation.”
He went on to say that the second bailout must not be subjected to “political uncertainty” arising from an election expected in April, a reflection of the ministers’ demand on the leaders of the three government parties to pledge to implement the rescue plan and continue to do so after the election.
These conditions are in addition to parliamentary approval of the plan and agreement on a further €325 million in cutbacks to complete a €3 billion austerity drive this year.
The Laos party has 15 seats in the 300-seat parliament so it cannot block the bailout deal when it goes to a vote tomorrow.
Both Mr Rehn and euro group president Jean-Claude Juncker have expressed confidence that the parliament will vote for the plan.
Asked late on Thursday night whether he had any fear of a negative vote, Mr Juncker said: “The answer is quite simple, it will not reject it. The Greek parliament will not reject the package.”
However, Mr Karatzaferis’s manoeuvre emphasised the fragility of political support for the bailout deal. Only 24 hours previously, Mr Papademos declared after weeks of negotiation that all parties in his government had resolved to back the plan.
In Brussels yesterday on the fringes of an EU meeting, Minister for Education Ruairí Quinn said he approved of the hard line adopted by his finance counterparts and said the time had come for Greece to “produce the rabbit” for its sponsors.
“I would support the political decision of the finance ministers saying you really have to come up to the plate with what you have committed to,” Mr Quinn said.
Completion of the deal would augur well for the Government’s campaign to reduce the cost of rescuing the former Anglo Irish Bank, he added.
“The arrival of this certainty, assuming Greece delivers, will enhance the opportunity for positive negotiations.”
Separately, it emerged on Thursday night that Germany may be willing to rework Portugal’s bailout plan.
In the moments before a meeting of euro zone finance ministers began, a Portuguese cameraman picked up German finance minister Wolfgang Schäuble telling Portuguese minister Vitor Gaspar that Berlin would “be ready” for a revision if required.
