After vote, Greece faces pressing timetable

Parliament?s approval early Monday of the terms of a new bailout for Greece appeared to have paved the way for Athens to receive more loans from the eurozone and the International Monetary Fund but the political fallout from the vote led to the confirmation that the interim government will not serve beyond April and may have sped up the process for electing a new PASOK leader.

Government spokesman Pantelis Kapsis confirmed that Prime Minister Lucas Papademos?s coalition government will keep to the commitment made when it was formed in November, which will see elections called as soon as Greece?s eurozone partners approve a new loan package of at least 130 billion euros and the bond restructuring process is completed.

?The bond swap will be concluded in March,? said Kapsis. ?Elections will be held in April.?

Greece faces a tight schedule over the next few weeks in order to secure the bailout and the haircut, or private sector involvement (PSI), before March 20, when two Greek bonds worth 14.5 billion euros mature. Without further loans, Athens faces the prospect of a default.

Eurozone finance ministers are due to meet on Wednesday, by which time Greece will also have to detail how it will make 325 million euros of savings on top of some 3 billion that it has already agreed with the troika of the IMF, European Commission and European Central Bank. The other demand that the Eurogroup made last week is that coalition leaders George Papandreou of PASOK and New Democracy?s Antonis Samaras provide written commitments that their parties will stick to the agreed program after the general elections.

Sources told Kathimerini that Finance Minister Evangelos Venizelos has supplied the two leaders with the letters that they need to sign.

Should the Eurogroup give the green light for a new bailout, the PSI deal will be announced by the end of the week and bondholders will be given roughly two weeks to accept the offer made by Athens. Venizelos has said that a deal needs to be concluded by February 17.

This week the troika is also due to produce a report on Greece?s debt sustainability, which European policymakers will use to decide whether they need to increase the loans to Greece or whether other measures need to be taken. A final decision is expected at the European Union leaders? summit on March 1 and 2.

In the meantime, the fact that the bailout vote led to 22 PASOK deputies and 21 ND lawmakers being expelled from their parliamentary groups is likely to hasten political developments. Sources said that the process of electing a new PASOK leader is to be hastened, with the vote possibly taking place this week.

Venizelos is the favorite to take over from Papandreou but may step down as finance minister afterward. It is for this reason that Papademos might hold off conducting a reshuffle. In any case, the prime minister is only expected to name a replacement for Transport Minister Makis Voridis, who quit last week, rather than conduct an extensive shake-up.