Poll result fails to unify PASOK

PASOK’s respectable showing in the local elections and Prime Minister George Papandreou’s decision to withdraw the possibility of snap elections from the political agenda does not appear to have helped to settle the government, which continued to show signs of friction yesterday. As Finance Minister Giorgos Papaconstantinou said that Greece was looking to make further spending cuts next year, Justice Minister Haris Kastanidis suggested the government should renegotiate the terms of the emergency loan memorandum with the European Union and the International Monetary Fund to gain a longer period of repayment. In an interview with CNN, Papaconstantinou gave the clearest public indication yet of how the government plans to continue its fiscal correction. «We believe it is impossible to continue cutting salaries and pensions, or raising taxes, as the economy is in a condition where any new rise in taxes would have the opposite results,» he said. «There is the possibility of further cuts in our public spending, which we have discussed with our creditors. We will see exactly what happens after discussions with the troika.» The government is due to find out next week the true size of Greece’s 2009 deficit, with Eurostat, the EU statistics agency, expected to put it as high as 15.5 percent of gross domestic product, according to some reports. The announcement, as well as a possible poor showing in the second round of municipal and regional elections on Sunday, will put a damper on any positives PASOK can take from the first round’s results. It seems, though, that some ministers are not waiting until next week to give a more guarded reaction to the position the government finds itself in. «We have to think very carefully, amid serious responsibilities for the government and the country, exactly how we will respond to the message the voters sent us,» said Kastanidis. Transport Minister Dimitris Reppas said that PASOK could not be «satisfied» with its result. However, Kastanidis added to the tension within the government by suggesting there should be a renegotiation of the memorandum’s terms, something that Papandreou and Papaconstantinou have ruled out. Sources close to the prime minister expressed frustration with the level of «introspection» within the government following Sunday’s result.