REFUSAL TO SIGN PLEDGE:ATHENS – Greece's new technocrat prime minister says he is confident fractious politicians will soon provide a commitment to painful austerity measures as demanded by the EU that will unlock funds needed to stave off bankruptcy.
The country is on the brink of running out of money.
“There is enough money for another 20 days,” a senior Greek government official said. “Without the loan tranche we will default on the €2.8 billion bond payments in December and we won’t be able to pay out salaries and pensions. The situation is very serious and this issue has to be settled this week.”
However, as prime minister Lucas Papademos tried to reassure EU officials in Luxembourg, the leader of the conservative New Democracy party repeated his refusal to sign any pledge and Greece’s main trade unions called a 24-hour strike for December 1st.
It will be the first major strike since Mr Papademos, a former vice-president of the European Central Bank, formed his three-party coalition to secure payment of an €8 billion aid tranche to avert default in December.
“Our partners demand written commitments. They want political leaders to send a letter of commitment over the policies which will be implemented in the coming years,” Mr Papademos said after talks with euro group head Jean-Claude Juncker in Luxembourg. “I believe party leaders will fulfil their duty . . . This must be done by the end of the month.”
While the Socialist Pasok of fallen prime minister George Papandreou and the far-right LAOS have signalled their readiness to sign, New Democracy leader Antonis Samaras has infuriated EU leaders by insisting his verbal consent is sufficient. Mr Juncker was reported to have said that Mr Samaras must sign the undertaking by Friday.
The EU and the International Monetary Fund want the written commitment because they suspect party leaders might otherwise try to slip their responsibilities, especially with a February 19th election looming.
“It has to be clear that there is also commitment from the largest opposition leader [Samaras] to implement. . . reforms. Saying that words are enough, we have passed that stage,” said Dutch finance minister Jan Kees de Jager. “We want a signature from this Mr Samaras. Otherwise they [Greece] won’t get money.”
The Netherlands, Germany and Finland – three of the most fiscally sound euro zone states who resent having to bail out Greece – will meet on Friday to discuss developments in Athens, Mr De Jager said.
Political analysts say Mr Samaras wants to distance himself from the austerity measures ahead of an election which he has said he believes he can win a majority to govern Greece alone.
Polls show New Democracy ahead but unlikely to be able to form a majority government.
Mr Samaras, a Harvard-educated economist, has long opposed the tax hikes and spending cuts backed by Mr Papandreou, his bitter rival and former college roommate, arguing that Greece needs pro-growth policies.
“Everything that has been done [by Samaras] is sufficient and complete,” New Democracy spokesman Yannis Mihelakis told the private ANT1 television channel, referring to the party’s support for the Papademos coalition and its 2012 draft budget.
Mr Papademos, who was also due to meet head of the European Central Bank Mario Draghi in Frankfurt later yesterday, said his government was focused on tackling the challenges facing Greece.
Along with the December aid tranche, Greece is also hoping its creditors will approve a €130 billion bailout agreed last month to keep it afloat until 2014. This will replace the original €110 billion package that has made up its aid so far. – (Reuters)