PASOK, ND fine-tune coalition deal [update]
PASOK and New Democracy officials were on Monday busy finalizing the details of a crisis coalition deal struck between the two parties late on Sunday.
After more than a week of intense horse-trading and turbulent politicking that pushed Greece closer to default and exit from the euro area, the country’s mainstream parties finally agreed to form a transition government to muscle a controversial international bailout through Parliament before snap elections were held.
Reports Monday said the two sides agreed that the most suitable date for the general elections would be February 19 next year.
Lucas Papademos, a former deputy president of the European Central Bank, was mentioned in the local media on Monday as the clear favorite to replace Prime Minister George Papandreou who has agreed to step down.
Sources on Monday said however that Papademos remains skeptical, as has not met with party leaders to be given the assurances that he needs.
PASOK vice president and Finance Minister Evangelos Venizelos and New Democracy vice president Stavros Dimas, who is also a former European Commissioner, were also reported as likely members of the transition government. But, ND leader Antonis Samaras was said to be reluctant to commit party members to the administration.
The coalition’s first priority would be to secure the next, 8 billion euro tranche within weeks, follow up on steps agreed with foreign lenders in the second bailout plan, such as submit and approve the 2012 budget before the end of the month.
Greece has come under strong pressure to reach some form of agreement before a meeting of eurozone finance ministers in Brussels on Monday. EU Economic and Monetary Affairs Commissioner Olli Rehn on Sunday warned Greece it had 24 hours to form a government that would honor its pledges or risk being kicked out of the eurozone, Reuters reported on Monday.
Papandreou on Monday telephoned foreign officials ? including German Chancellor Angela Merkel, Eurogroup chairman Jean-Claude Juncker, European Council President Herman Van Rompuy, and European Commission President Jose Manuel Barroso ? to inform them on recent developments.
Merkel Monday expressed her ?respect for the decision? by Papandreou to resign, her spokesman said. She thanked Papandreou «for his courage and decisiveness» in steering Greece through the debt crisis, Steffen Seibert said, adding that she urged the next government to implement urgent reforms.
Papandreou’s tenure moved into endgame last week after his explosive decision to call a referendum on the bailout deal reached earlier in Brussels. The announcement appeared to take European officials by surprise and threw markets into turmoil.
Papademos, 64, is widely credited with masterminding Greece?s transition from the drachma to the euro. His quiet, technocratic style, many analysts say, is Greece’s best hope of putting an end to months of uncertainty and political bickering.
Reports said Papademos would land in Athens later on Monday.
Greece’s smaller parties appeared split on the news of the deal. Dora Bakoyannis, leader of Democratic Alliance, on Monday vowed to back the caretaker government. But a less upbeat Fotis Kouvelis, leader of the moderate Democratic Left party, said the agreed coalition was short of a national unity government.
On Sunday, the Greek Communist Party (KKE) and the leftist SYRIZA party both slammed the agreement for lacking any democratic legitimacy. The interim leader is likely not to be an elected official.
LAOS chief Giorgos Karatzaferis, who publicly urged the two leaders to join hands during the weekend, on Monday complained that the outcome is effectively a PASOK-ND government.
?It’s still better than nothing,? he said of the deal after meeting with President Karolos Papoulias on Monday.
