PASOK and New Democracy, as well as two of Greece?s smaller parties, failed in a bid to pass a law on Thursday that would have given them more favorable borrowing terms, helping to reduce their mounting debt.
The two main parties, along with the Communist Party (KKE) and the Coalition of the Radical Left (SYRIZA), struck on a formula that would have eased the financial pressure they find themselves under, especially with a view to the early elections due to be held in April or May.
The legislation that was submitted to Parliament after being tagged onto a bill concerning livestock breeding proposed that the future interest on the parties? loans be reduced from 8.65 percent to 4 percent. This would have saved PASOK and New Democracy about 8 million euros a year. It also proposed that the interest on loans which have yet to be repaid would be written off.
The draft law, which was submitted following an agreement between PASOK and ND, also suggested that only 50 percent of state funding for the two main parties be given directly to banks to pay off their debt. A recent proposal by Interior Minister Tassos Yiannitsis put this figure at 60 percent. The bill put forward in Parliament foresaw that parties owing under 20 million euros, which relates to KKE and SYRIZA, would only have 20 percent of their state funding set aside for paying off their debt.
The would-be legislation was opposed by the nationalist Popular Orthodox Rally (LAOS), which does not have any bank loans, the centrist Democratic Alliance, which has campaigned for more transparency in party funding, and the Democratic Left, which has not received any state money so far.
It is not clear if the parties will attempt to change the amendment and resubmit it to Parliament. There is concern at PASOK and ND headquarters about the financial strains of running an election campaign if the parties? debts, which total about 250 million euros, are not eased.