Interim agreement still in balance

Greece appeared close to naming a new prime minister and cabinet on Tuesday afternoon but by late in the night further doubt was heaped on proceedings after New Democracy leader Antonis Samaras balked at eurozone demands for a written commitment to the fiscal targets and measures demanded by the country?s lenders.

An emergency cabinet meeting finished shortly before 3 p.m. During the talks, Prime Minister George Papandreou is said to have informed his ministers to have their resignations ready to speed up the process of forming a new government.

Ex-European Central Bank Vice President Lucas Papademos was back in the frame for the job of prime minister after speaking with Papandreou earlier in the day.

He is thought to want to pick some members of the cabinet, which could include politicians from PASOK and ND. With one eye on snap elections next year, the conservatives appear reluctant to commit members to the cabinet.

However, the creation of a new cabinet appeared to be put on hold when Samaras objected to demands from Brussels for the ND leader, as well as Papandreou, Bank of Greece Governor Giorgos Provopoulos and the next prime minister and finance minister to sign a commitment to uphold existing agreements, including the new bailout agreed last month. European Economic and Monetary Affairs Commissioner Olli Rehn said without the signed documents, Greece would not receive the loan installment of 8 billion euros it is expecting.

?It is essential that the entire political class is now restoring the confidence that had been lost in the Greek commitment to the EU-IMF program,? said Rehn.

?It is essential that a new government will express its explicit and unequivocal commitment in writing concerning all the decisions taken by the 17 euro area member states on October 27,? he said.

The next loan tranche ?can then be disbursed once there is full clarity about Greece sticking to the agreed course and policies,? Rehn said.

Samaras, under pressure from elements in his party displeased with ND?s involvement in the coalition, insisted his verbal commitment should be enough. ?There is such a thing as national dignity,? he said. ?I have repeatedly explained that, in order to protect the Greek economy and the euro, the implementation of the October 26 agreement is inevitable.?

Troika sources told Kathimerini that the text to be put before Greek officials has not been drafted yet but will include a commitment to apply the terms of the current memorandum of understanding between Athens and its lenders.

It will also ask the signatories to commit to the drafting of the new memorandum that will accompany the bailout agreed on October 26. PASOK and New Democracy leaders will also be invited ahead of snap elections next year to commit in writing to adopting the new measures.

ND sources insisted the standoff would not damage coalition talks.

Samaras is expected to write to the European Commission and eurozone officials to explain that he is committed to the existing agreements and fiscal targets but wants to reserve the right to change the policy mix.

Before elections in Portugal earlier this year, conservative leader Pedro Passos Coelho signed a document committing to the implementation of the already existing loan memorandum adopted by the outgoing Socialist government but allowing for minor policy changes, based on the troika?s quarterly reports.