GREECE WAS still in the grip of uncertainty last night after tentative contacts between the ruling socialist Pasok party and main opposition New Democracy party on the formation of a unity government appeared to have floundered amid acrimony.
After another day of intense political activity in Athens that put it once again at the centre of international attention, Greek prime minister George Papandreou publicly refused to yield to a condition made by the opposition that he step down to allow for the creation of a caretaker government.
However, according to a Reuters report late last night, Mr Papandreou had apparently struck a deal with ministers, led by finance minister Evangelos Venizelos, to step down and make way for a coalition government provided they help him win a confidence vote at midnight tonight.
Earlier, Mr Papandreou announced that he was withdrawing his controversial plan to hold a referendum on the haircut and bailout deal agreed at a euro zone summit on October 28th.
The referendum plan had shocked his citizens, enraged his European partners and alarmed Greece’s creditors.
Announcing his decision to an emergency meeting of his cabinet, Mr Papandreou said that the plebiscite was no longer necessary following New Democracy’s earlier announcement that it would support the Brussels debt deal.
New Democracy’s surprise U-turn on the deal – which involves a new €130 billion bailout package and a 50 per cent writedown on the state’s debt – was announced earlier, when Mr Papandreou’s leadership appeared to be on the verge of collapse.
Greeks awoke to the news that Mr Papandreou had received an “ultimatum” from French and German leaders at the G20 summit in Cannes regarding the wording and timing of his proposed referendum and, moreover, that his finance minister had broken ranks on the plebiscite plan.
Evangelos Venizelos’s statement fuelled rumours that the ambitious minister had indeed hatched a plot earlier in the week to topple his leader, a long-time inner-party opponent.
The drama continued for the much of the day as a series of Pasok MPs lined up to condemn the referendum proposals. “The lies have finished. It’s time for responsibility by all, by the government and by the opposition,” one of the dissenting MPs, former minister and European commissioner Vaso Papandreou, said.
By early morning Pasok appeared to have lost its parliamentary majority after two MPs declared, citing opposition to the referendum, that they would not vote for their leader in the confidence vote.
Sensing that the moment of New Democracy had finally arrived, its leader, Antonis Samaras, called during the afternoon for a caretaker government whose responsibilities would be limited to three tasks: the ratification of the bailout deal by the parliament, the securing of the Greece’s sixth bailout tranche, worth €8 billion and the calling of elections before Christmas.
A crucial detail of the New Democracy proposals – and one that would mean that Mr Papandreou would have to step down — was that the interim government be staffed by technocrats and not elected MPs.
Mr Papandreou’s subsequent comments at an emergency meeting of his cabinet and later at a televised meeting of his parliamentary party that the referendum idea had succeeded in getting the opposition to consider a measure of consensus enraged New Democracy.
“I will be glad even if we don’t go to a referendum, which was never a purpose in itself,” he said.
During a subsequent phone conversion between the two men, who were roommates at Amherst College in the US in the early 1970s, Mr Samaras insisted that Mr Papandreou resign in order to pave way for the creation of a caretaker administration.
Later, speaking to parliament, Mr Papandreou said he was not tied to his post. “My position is that talks with the opposition for the formation of a broader scheme should start immediately. Let’s do it as fast as possible, carefully, without dangers.”
Now that the referendum proposal is off the table, Mr Papandreou might scrape by in the confidence vote if rebel MPs return to the fold. But danger still looms.
“The prime minister is out of touch. I feel sorry for our party and for our government,” Vaso Papandreou said last night.