Parties that led Greece to ruin to form ‘salvation’ government

Antonis Samaras

Greece's conservatives said they are poised to form a coalition government with the Socialists today (19 June), allowing the two parties that dominated politics for decades and ruined the country to share power despite a major anti-establishment election vote.

Sources inside Greece’s victorious New Democracy party say they expect the third-placed PASOK to agree to form a coalition government, Euronews reported.

Antonis Samaras, whose New Democracy party won Sunday's election, was given a three-day mandate by the country's president to form a coalition government. Late yesterday, he held talks with PASOK leader Evangelos Venizelos.

New Democracy won 29.7% of the vote, ahead of the leftist Syriza with 27%. Samaras will need the PASOK Socialists, for decades Greece's largest party and now humbled by angry voters, to form a government. Both New Democracy and PASOK are part of the “pro-bailout” camp.

A senior New Democracy official expected agreement soon on a new cabinet with the PASOK and possibly the Democratic Left, a small centre-left party. New Democracy will have 129 seats in the 300-seat parliament, thanks to a 50-seat bonus given to the party which comes first in the elections. PASOK will have 33 MPs and the Democratic Left 17 MPs.

New Democracy and PASOK alternated in power from the fall of military rule in 1974 until last year, when Greece's economic crisis forced the rivals to share power in a national unity government tasked with rescuing the country from bankruptcy.

Many Greeks hold both parties responsible for the nation's near bankruptcy, which forced it to take bailouts from the European Union and IMF in 2010 and again this year.

"I am optimistic that this time they will agree to form a government," a Greek banker who declined to be named told Reuters. "They have realised that there is no margin of error or further delays. A third election would be a disaster."

Without further international support, the Greek government will be unable to pay its civil servants starting in July. Experts have also warned of an energy collapse of the country's electricity and natural gas systems without fresh funds.

Watering down the bailout terms?

Samaras promised Greeks and prospective partners that he would water down the painful terms of the EU/IMF bailout that is keeping Greece afloat, paying scant attention to protests from European paymaster Germany, which opposes giving the country leeway on its commitments.

"We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships," he said.

But any efforts to veer off the prescribed austerity path will be viewed with anger from European partners who are already irritated by what they see as the slow pace of Greek reform. Germany has ruled out more than minor delays part of the €130-billion rescue package.

Chancellor Angela Merkel said at a meeting of G20 leaders in Mexico that any loosening of Greece's agreed reform promises would be unacceptable and reiterated that Athens had to stick to the commitments it had already made.

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