Gov’t relief after EU encouragement

The mood was cautiously upbeat in the ranks of the embattled government on Wednesday following a string of reassuring statements by European officials in Brussels and Berlin and the confirmation that foreign inspectors would return to Athens on Thursday to resume an audit, but a statement by outspoken Deputy Prime Minister Theodoros Pangalos – ostensibly expressing solidarity with taxpayers – caused fresh upheaval.

According to sources, there was relief at the Maximos Mansion and in the Finance Ministry following the encouraging words of German Chancellor Angela Merkel, who called for ?a strong Greece in the eurozone? ahead of talks with Prime Minister George Papandreou in Berlin on Tuesday. Her comments were echoed by European Commission President Jose Manuel Barroso, who said on Wednesday that ?Greece is and will continue to be part of the eurozone.?

But the support of Merkel, and other European Union leaders, was clearly linked to Greece making good on its commitments. In comments to state channel NET, Merkel suggested that the terms of Greece?s bailout might change. ?So we must now wait for what the troika finds out and what it tells us: Do we have to renegotiate or do we not have to renegotiate?? she said.

Despite the caveats, officials in Athens said they were confident that Greece is on track to receive a sixth tranche of rescue funding valued at 8 billion euros and that a second bailout package for Greece, which was hammered out in July by EU leaders, would be implemented.

Still, the government has some way to go before convincing its foreign creditors that new austerity measures will be implemented, not least because many of the reforms – such as cutbacks in the public sector and a new property tax – have divided the ruling party.

Pangalos told Mega TV on Wednesday that he would be unable to pay the new tax without selling one of his properties. In comments made a few hours after he voted in Parliament to back the tax, the deputy premier said he would be forced to sell one of his eight properties to pay the levy.

?I will be obliged to sell some of these properties,? he said. Asked what would happen if he failed to find a buyer, Pangalos remarked, ?I don?t know, maybe Venizelos will put me in jail,? referring to Finance Minister Evangelos Venizelos.

Pangalos?s comments elicited no formal response but stirred concerns as they come on the back of a growing ?Won?t Pay? movement that has been embraced by some left-wing parties.

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