Samaras Splits New Democracy Over EU Letter

ATHENS – A letter sent to European Union officials by New Democracy leader Antonis Samaras pledging his conditional support for a proposed $175 billion second round bailout and austerity measures to keep Greece from going bankrupt has caused a rift in the party with hardliners who don’t want to give written guarantees. Samaras had been under pressure by leaders of the EU-International Monetary Fund-European Central Bank to sign the deal but refused, saying his word was enough.
But that threatened to stop the flow of international aid, including a stalled $11 billion loan needed to keep paying workers and pensioners. The government said it has only enough money to keep operating until Dec. 15. Samaras said asking him to sign the contract was an insult to national dignity, but after German Chancellor Angela Merkel said the loans would stop unless he did he quickly fired off a letter of support, through the European Commission, but it’s uncertain whether that will be enough to satisfy the Troika.
“The commission has received the letter. We will need to discuss it with our partners in the Eurogroup,” the 17 countries using the euro as a currency, a Commission spokesman told Dow Jones. Olli Rehn, European Commissioner for Economic and Monetary Affairs, also said the letter had been received. “I’ll read it,” Rehn said to reporters on his way out of a European Parliament committee hearing. The letter stated that Samaras would support the decisions taken at an EU meeting on October 26, when the new debt plan for Greece was forged, “and implement the economic policies linked to those decisions.”

But he said that “certain policies have to be modified” if Greece is to emerge from the fourth year of recession. Samaras added that he would propose “viable policy alternatives, strictly within the framework outlined by the program,” referring to the pay cuts, tax hikes, slashed pensions and scores of thousands of layoffs he earlier said he opposed, as he did the bailouts. That created social unrest that led to the resignation of George Papandreou as Prime Minister earlier this month and the formation of a temporary coalition government led by banker Lucas Papademos, and including the ruling PASOK Socialists, New Democracy, and the far Right-Wing LAOS party which is supporting Samaras’ stance.
Sources told Kathimerini that Samaras had aimed to find a “formula” that would satisfy the country’s creditors while also saving him face on the domestic level, fearing a backlash from Greeks whose pay and pensions were at risk. Samaras is also trying to position himself for elections tentatively set for Feb. 19 when PASOK will have to find a candidate to oppose him. Finance Minister Evangelos Venizelos, a PASOK member who previously failed in a challenge to replace Papandreou as party leader and who is said to have ambitions to become Premier, was voted the worst financial chief in the EU by the Financial Times and his party has slipped to 18.5 percent in a survey that showed New Democracy has only 28.5 percent, raising the chances of another coalition government next year.
Compounding Samaras’ dilemma is fierce infighting within New Democracy between moderate and liberal members and arch Right-Wingers who urged him to hold the line and refuse to sign a contract with the EU, nor send a letter. “If we do not step on the brakes now then there will be more to come,” Failos Kranidiotis, an informal adviser to Samaras, told SKAI TV. He said EU warnings the $11 billion loan payment would be withheld were “paper threats” and a bluff he urged Samaras to call.
Kathimerini reported that Kranidiotis also suggested that PASOK may have been behind the demands for Samaras to write to EU officials in a bid to tarnish his image ahead of the early elections that are due to take place next year. A similar theory was put forward by Yiannis Manolis, another member of ND’s so-called “popular right” wing. Manolis accused EU officials of asking Samaras to sign a “blank piece of paper” that would allow them to impose more austerity measures.
But another outspoken member of the party, Athens MP Gerasimos Giakoumatos, said that the time for “bravado” was over. “New Democracy is a party that is doing its duty for the country,” he said, according to the newspaper. Kranidiotis blasted party members he said would not fall in line lockstep with New Democracy dogma that he supported. “These types of MPs are the remnants of a past era for New Democracy,” he said in reference to Kyriakos Mitsotakis, and also Sotiris Hatzigakis, a long-time prominent member who was kicked out of the party after he said that “far right elements” were taking over, an apparent reference to Kranidiotis. Mitsotakis accused Kranidiotis of being a populist and an opportunist. He was backed by Mitliadis Varvitsiotis, also a member of ND’s moderate wing, who pointed to the party’s liberal and pro-European credentials.