ATHENS – Trying to keep a rift in his uneasy alliance with his coalition partners from widening, new Greek Prime Minister Antonis Samaras met with them and agreed to reverse himself yet again and try to press international lenders for changes in austerity measures that have deepened the country’s recession.
During the campaign running up to the June 17 elections, Samaras – who initially opposed austerity measures, then supported them – said he would ask the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) to back off some of its demands and get two more years for Greece to impose more reforms.
He immediately backed away from that stance after meeting Troika officials who told him they were in no mood to renegotiate and that Greece had to stick to its agreement as well as make another $15 billion in cuts or the money pipeline could be shut off. Greece is surviving on a first series of $152 billion in rescue loans from the Troika, which has another $173 billion in hand ready to begin being disbursed, but only if the new government follows its orders.
Samaras, whose New Democracy Conservatives narrowly won the election over the anti-austerity Coalition of the Radical Left (SYRIZA) did not have enough of the vote to form a government and had to form a partnership with his rivals, the PASOK Socialists of Evangelos Venizelos and the tiny Democratic Left led by Fotis Kouvelis.
With SYRIZA leader Alexis Tsipras accusing Samaras of “surrendering” to the Troika, and Venizelos reportedly upset that Samaras through his new Finance Minister Yiannis Stournaras backed away from trying to renegotiate some of the terms that he and Venizelos signed, the Premier agreed to involve his partners in EU meetings and see if the Troika would listen to overtures to change some of the terms. The pay cuts, tax hikes, and slashed pensions have led to a decline in tax revenues, 22.7 percent unemployment and the closing of 1,000 businesses a week.
While Samaras and his partners tried to smooth over their differences, Greek media reported that cracks were widening in the shaky coalition with Venizelos and Kouvelis – who refused to allow any of their members to join the Cabinet – making sure to distance themselves from measures unpopular with voters. Greeks have been protesting, striking and rioting for two years and labor unions are already planning more strikes to protest austerity and planned privatizations.
Acceding to their demands, Samaras told Venizelos and Kouvelis that he would have Stournaras bring up renegotiation when he meets with leaders of the Eurozone of the 17 countries that use the euro, at a meeting sometime later this month. In an unprecedented move, Samaras will not let Stournaras act alone and said he will let Venizelos – a former Finance Minister who doubled income and property taxes and taxed the poor – and Kouvelis make up a triumvirate negotiating team, giving Greece three voices in its talks. Other key officials could also represent Greece.
HE’S NOT HAPPY
The meeting was called after Venizelos was reportedly angered that Samaras did not even try to renegotiate as he promised and when Stournaras at a Eurozone meeting said Greece would not ask for any concessions until it met reform demands. “It is very important that we convey to the Greek people that we will do all we can to improve the terms of the support program,” Venizelos said after the talks at Maximos Mansion. “The starting point for the review is the extension of the fiscal adjustment period. We have to convince our partners that the recession is much deeper than the one forecast, so we need to spread the fiscal adjustment over a longer period so it is easier on citizens and growth.”
Venizelos avoided praising Stournaras but said that the finance minister and the three party leaders were in agreement on the way forward. “Mr. Stournaras has the ability and experience to implement government policy, exactly as the three leaders have agreed,” said the PASOK chief. Venizelos added that the best way for Greece to regain its credibility was by implementing structural reforms and privatizations but he added that Greece’s lenders would also have to provide assistance. “We have to convince our partners that it is important to frontload the loan installments so that we can improve liquidity in the market,” he said. “Without this, there can be no growth and no investment,” he said, according to the newspaper Kathimerini.
Speaking to state-run NET TV, Tsipras said that the government had failed to take advantage of the June 28 Eurozone meeting where Samaras was absent because he was recovering from eye surgery and Stournas had not yet been appointed. At that meeting, Spain got bailout terms without austerity and got its banks recapitalized without adding to the country’s debt, while Samaras had already agreed to let Greek bank recapitalization be tacked on to the country’s debt. “We would have fought the battle at the summit, where the government was absent,” said Tsipras. He said the coalition partners had caved in to the Troika.
Kouvelis denied he had given in and said he and PASOK had agreed to support New Democracy. “The government is trying to create the conditions for a renegotiation, so we can move away from the odious measures in the memorandum,” said Kouvelis. “We are looking for alternative measures as well as steps that could provide relief for society.” Sources told Kathimerini that Kouvelis agreed with Venizelos’s position that an extension should form the basis of any discussion about changing the bailout terms. “The renegotiation will happen, we are working on it but it will be a long and painful process,” he reportedly said.