Sun, May 06, 2012 - Page 11 News List

Euro at stake in Greek vote: socialists

‘NOBODY’S CRUTCH’:If the Greeks elect a government that reneges on an austerity pact, the IMF, EU and ECB could refuse to disburse the 130 billion euros in bailout funds


Greek Socialist PASOK party leader Evangelos Venizelos waves to supporters during a rally in Athens on Friday.

Photo: Reuters

Socialist leader Evangelos Venizelos told voters on Friday that Greece might have to abandon the euro if they fail to support him in Sunday’s general election.

His last appeal before the poll echoed a stark warning by German Finance Minister Wolfgang Schaeuble, who said earlier that Greece’s next government must abide by the commitments Athens made in exchange for a 130 billion euro (US$170 billion) international bailout or “bear the consequences.”

“On Sunday, our people’s fate is at stake,” Venizelos told a few thousand supporters who came to hear his final pitch for support in the Athens square in front of parliament where there have been repeated anti-austerity demonstrations, some of them violent.

“Sunday will decide if we stay in Europe and in the euro ... or if we send the country down the road of bankruptcy and its people to massive poverty,” Venizelos said.

The “troika” of IMF, EU and European Central Bank lenders say the May 6 election could put at risk the fiscal cuts and reforms Greece must deliver in exchange for the money it needs to stay solvent and turn its ailing economy around, including 11.7 billion euros of new savings due next month.

“The future government in Greece must abide by the country’s commitments,” Schaeuble said in a speech to his ruling center-right Christian Democrats. “If Greek voters were to vote for a majority that does not honor those agreements, then Greece will have to bear the consequences of that.”

Conservative New Democracy and Venizelos’ Socialist PASOK are the only two major parties backing the bailout and are expected to try to form a coalition after the vote to press ahead with the program.

They will be the top two parties, but their former dominance has been sapped by anger over economic suffering and it is uncertain whether they can win enough votes to govern without external support.

A raft of smaller left and right wing anti-bailout parties vying for third place are expected to perform well in the poll, tapping into popular anger against wage cuts and record unemployment resulting from reforms demanded by the lenders.

Venizelos, who negotiated the bailout as finance minister, said that the Socialists should not be taken for granted as a coalition partner.

“We’re nobody’s crutch,” said Venizelos, who has helped his party rebound from single-digit popularity ratings since becoming PASOK’s leader in March.

The once dominant Socialists are trailing New Democracy in the polls and are expected to take less than half the number of votes they scored in the last election in 2009.

Venizelos dismissed New Democracy’s pledge to slash taxes and increase pensions, promising instead to soften future fiscal cuts by spreading them over three years instead of the two set out in the bailout plan.

The plan allows for an extension if the country’s recession, already in its fifth consecutive year, proves deeper than expected.

Greece’s 215 billion euro economy has contracted by about 20 percent since 2008 in one of the worst recessions seen in postwar Europe. GDP is seen contracting by as much as 5 percent more this year.

Venizelos reiterated his pledge not to impose new taxes or general wage and pension cuts if he wins the poll, focusing instead on reforms like opening up closed professions.

PASOK, which came to power in 2009 with nearly 44 percent of the vote, is expected to take only 14 percent to 19 percent this time.

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