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Greek Socialist Venizelos Launches Talks to Form Coalition But May Lead to Another Election

 

 

 

 

 

 

Socialist Venizelos launches bid to form coalition

By News Wires (text)
France 24, 2012, AFP -

Greece's Socialist leader Evangelos Venizelos faced the thankless task of forming a viable government Thursday, a day after a bid by a radical left-wing anti-austerity party ended in failure.
Mainstream Greek parties, including Venizelos' own, are showing signs of wanting to renegotiate the terms of an international bailout.

But creditors have warned a loan to be paid on Thursday could be the last if Athens reneges on its reform commitments, raising questions over its future in the eurozone.

Alexis Tsipras, leader of the Syriza party, now the second largest in the Greek parliament after the conservative New Democracy group, admitted defeat late Wednesday in his attempt to form a government.

Both the Communists and the Democratic Left had declined to join him in a coalition.
"We cannot make true our dream of a left-wing government," said Tsipras. "Tomorrow I shall hand back the mandate given to me by the president of the republic and we shall continue to take part in the constitutional processes."

Already on Monday, New Democracy leader Antonis Samaras had tried and failed to form a coalition.

Now Venizelos gets his chance as the leader of the Socialist Pasok party, the third-largest presence in parliament after taking a beating in Sunday's election.

But as he struggles to find a way through the political deadlock and avoid the need for another election, he knows that the parliamentary arithmetic is against him.

Voters punished both Pasok and the New Democracy for together having pushed through punishing austerity measures in return for the international loans.

Sunday's election slashed the two parties' combined presence in the 300-seat chamber to just 149, including a 50-seat bonus for New Democracy for being the largest party -- from 201 in the previous parliament.

The other 151 seats are held by parties that campaigned against the austerity programme, from far-left groups such as the communists and Syriza to the neo-Nazi Golden Dawn, which won 21 seats.
That makes it difficult to see how Venizelos could succeed where New Democracy's Samaras failed.

Venizelos helped negotiate Greece's second international bail-out, which was granted on condition the then Pasok-New Democracy coalition government implemented the harsh austerity measures required by the EU and IMF.

But both mainstream parties are now suggesting it will have to be renegotiated.

Venizelos now says Greece needs to "look for the best amendment possible of the terms" of the agreed reforms, and New Democracy leader Samaras said renegotiating the bailout was "certainly realistic".

Their shift echoed the anti-austerity rhetoric of Syriza's Tsipras, who argued that Sunday's overwhelming anti-austerity vote had "clearly nullified the loan agreement and (pledges) sent to Europe and the IMF".

Such talk has angered a number of leaders in Europe, as well as alarming the markets.

Speaking in Berlin, German Chancellor Angela Merkel Wednesday stressed that EU countries that have signed the bloc's fiscal pact for greater budgetary discipline had to keep their promises.
"Everyone must stick to the things we have agreed," Merkel told reporters.

German Finance Minister Wolfgang Schaeuble added: "If Greece wants to remain in the eurozone, there is no better solution than the path it has already taken."

Referring to austerity cuts and reforms in return for loans, he said: "You can't have one without the other."

In Brussels, a European Union official told AFP that Greece would receive a 4.2-billion-euro loan as expected on Thursday, but a further one billion would be held back till Monday.

Eurozone officials who met Wednesday evening "decided to leave the decision on disbursement of one billion to the Eurogroup on Monday," said the source, referring to a scheduled meeting of eurozone finance ministers.

Luxembourg Foreign Minister Jean Asselborn warned that future loans would not be forthcoming unless Greece installed a stable government.

"We have to say to the Greek people right now that the situation is serious, that no European Union country will be able to release even a portion of the 130 billion euros for the Greeks, if there is no functioning government that respects the rules and manages the disbursed money," he said.
Should Venizelos fail to put together a coalition, Greece's president would be forced to call on all parties to form a "unity" government. If that cannot be be done by May 17, new elections will be called.

European stock markets and the euro slid further on Wednesday as investors sought shelter from the strains in the eurozone driven by the political upheaval in Greece and France.

On the eurozone bond market, borrowing rates for Spain and Italy rose sharply while Germany attracted safe haven flows, driving its borrowing rate to record lows.

Greek coalition talks will likely result in another election - sociologist

Russia Today TV, 10 May, 2012, 08:24


Greece may be in for a long period of political wrangling over the governing coalition's makeup, as recent elections failed to deliver any party a clear majority. RT discussed the situation with Greek sociologist Costas Panayotakis.

­RT: What are the chances of an agreement being reached – could this all go to another election?

Costas Panayotakis: I think that another election is the likely result, although the political situation in Greece is in flux, so nobody can make any safe predictions. It will now be up to the leader of the Socialist Party, which was the third party in parliament to make an effort to form a government, which would enjoy the support of a majority in parliament. And if that doesn’t work, then the president would call all the political leaders to discuss whether they could find a way [to] form a government. And if that doesn’t work, then there will probably be an election in June.

RT: The neofascist party Golden Dawn managed to win around six per cent of the vote. Is this an indication that ultra-right nationalism is gaining ground in Europe as a whole?

CP: I think this is a disturbing development. In times of crisis, the extreme right often tries to manipulate and funnel people’s anger by scapegoating immigrants or minorities. So this is certainly disturbing and I think part of the vote was a protest vote of people who were sick of mainstream parties. And hopefully, as the limelight focuses on the Golden Dawn party, it will become less shadowy and people will really see what they stand for and hopefully support for them will go down.

RT: If Greece were to abandon the bailout and quit the Eurozone, what would be the consequences for the country?

CP: Abandoning the bailout doesn’t necessarily mean that Greece would have to quit the Eurozone. This is the threat that is being used by the pro-austerity parties and by the Europeans, but the Greek Radical Left Coalition, which is an anti-austerity movement, is betting on the fact that the domino effect would be so large for the rest of Europe if Greece were to be exacted that ultimately the Europeans would have to renegotiate a solution that was viable and more socially just for Greek citizens.

RT: What about the impact for Greece itself? Wouldn’t it go bankrupt if it rejected the bailout? Would it have to exit the Eurozone then?

CP: This is debatable. Nobody knows what would really happen. The Conservatives and the Socialists agree with that analysis. The other sides support a moratorium on the payment of the debt, and they argue that the catastrophe has already arrived in Greece, with unemployment over 20 per cent and anger and desperation growing. They say that this recipe has not worked for Greece, so the alternative is to try something different. Austerity is not the solution, it’s part of the problem.

Greece’s ruling parties suffer major setback

Russia Today TV,  07 May, 2012, 07:29

With 97 per cent of the votes counted in Greece’s crucial parliamentary elections, the two long-term ruling parties have lost support to anti-austerity parties. Analysts warn it could potentially endanger the country’s debt obligations.

According to early results, the center-left party PASOK has received 13.3 per cent, down from 43.9 per cent in the 2009 elections. So far the leading party is the center-right New Democracy with 19 per cent of the vote and 109 seats, down from 33.5 per cent in 2009.

The voters had been expected to punish the two main parties for the harsh austerity measures imposed during the spiraling economic crisis. Leadership has alternated between PASOK and New Democracy for the last 38 years. Typically they take around 80 per cent of the vote.

Altogether there are 32 parties vying for position in the nation’s parliament with smaller more radical groups expected to gain ground. Up to 10 were predicted to win seats according to polls.

They offer an alternative to the unpopular cuts and are capitalizing on public disillusionment over the current government’s mismanagement of the country.

The PASOK and New Democracy parties both begrudgingly supported the 110 billion-euro European bailout agreed last year to save Greece’s moribund economy. The agreement prompted a chain of crippling austerity measures that have drawn the ire of the Greek public.

Former Finance Minister Evangelos Venizelos, now head of PASOK, warned the Greek public that the country could face expulsion from the eurozone should anti-bailout parties take power.

"Sunday will decide whether we remain in Europe and the euro, and we stay on a course that is difficult but safe, after having covered most of the distance, to finally emerge from the crisis and [austerity]," he said during his final campaign rally in central Athens on Friday night.

Political analysts have expressed concerns that a lack of unity in the Greek government could potentially endanger the country’s debt commitments and bring about another bailout or possible exit from the eurozone.

"Political paralysis in Greece following the elections could lead to a default and even threaten a euro exit, in our view," Bank of America strategist Athanasios Vamvakidis wrote in a paper published on Tuesday.

The knock-on effect of Greece leaving the eurozone could sound a death-knell for both the Italian and Spanish economies, both flagging under the weight of toxic debt.

The biggest surprise of this elections is the success of Greek extreme-right Golden Dawn party which is projected to enter parliament for the first time in nearly 40 years, according to exit polls. The neo-Nazi party is poised to take about 7 per cent of the vote which is comfortably above the 3 per cent threshold required to enter parliament.

“A new nationalist movement dawns. Hundreds of thousands of Greeks have dynamically joined the national cause for a great, free Greece,” Golden Dawn said on its website. The extreme-right party’s success is fueled by rising anti-immigrant sentiments amid the deteriorating economic crisis that has led to recession and unemployment.