NEWS

Development minister supports extension of PM?s mandate

Greece’s Pasok party favors extending the term of interim Prime Minister Lucas Papademos to ensure speedy implementation of reforms.

?We are in favor of an extension of the life of Papademos?s government? because ?he is better for the country,? Michalis Chrysochoides, minister for growth, competitiveness and shipping, told reporters late Wednesday in Frankfurt. The comments were embargoed until Thursday. ?Elections should take place by the end of the constitutional term in 2013.?

Papademos, a former European Central Bank vice president, formed an interim government on Nov. 11 after Prime Minister George Papandreou was forced to resign over his call for a referendum on Greece?s second bailout package. Papademos, whose government is backed by two of the five Greek parliamentary parties, is tasked with securing the bailout and completing a debt swap with private investors before stepping down so that elections can be held.

Antonis Samaras, the leader of New Democracy, the second- biggest party after PASOK, said on Feb. 11 he will call for elections as soon as lawmakers and private creditors have completed the bond swap that would cut Greece?s debt by 100 billion euros. New Democracy would receive 27.5 percent support if an election was held now, while the socialist PASOK party, which won the last election in 2009 and has the most seats in parliament, would get 11 percent, according to an opinion poll by VPRC for Epikaira magazine published today.

Feb. 20 Decision

Euro-area finance ministers have delayed a decision on a second Greek bailout package several times, demanding even more savings and pledges from key party leaders to support reforms beyond elections that could come as early as April.

While ?further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of program implementation,? Europe is set to make ?all the necessary decisions? on Feb. 20, Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, said last night.

?We?ve implemented everything the Troika has asked,? Chrisochoides said, referring to observers from the International Monetary Fund, European Commission and ECB. ?It?s now up to Brussels to give a positive view to establish a new future for Greece. I don?t think there?s reason not to make a decision on Monday.?

Chrisochoides said discussions about an exit of Greece from the 17-nation monetary union are dangerous and should be avoided.

?There is no option for a country to exit the euro,? he said. ?We have avoided this discussion because some people in the market like that discussion and look for an opportunity to attack a country. We must make Greece survive in order to protect the euro.?

The ECB should consider playing a ?more important, active role? in helping Greek banks refinance to allow them to extend credit to small- and medium-sized companies, Chrisochoides said.

?The ECB gives liquidity to Greek banks but it?s not enough,? he said, adding that looser collateral rules may be needed.