Former European Central Bank vice president Lucas Papademos was yesterday tipped to emerge as Greek prime minister as political leaders bargained over who would lead a new coalition to push through a bailout before the country runs out of money in the middle of next month.
However, whoever leads the transitional government of national unity will have a monumental task in restoring order to a country whose chaotic economy and politics are shaking international confidence in the entire euro project.
With the EU demanding a quick resolution to the political crisis, Greek Prime Minister George Papandreou sealed a deal on Sunday with the conservative opposition on the crisis coalition to approve the international financial aid package.
Papandreou informed European leaders, including German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso, by phone yesterday about efforts to form the coalition, his office said.
The Greek leaders’ job yesterday was to agree a new prime minister, possibly a technocrat who must exert authority over hardened party chiefs from the center-left and center-right, and made decisions that would affect Greeks for a decade.
Papandreou also spoke to conservative New Democracy party leader Antonis Samaras on the coalition and his office said more talks would follow later in the day.
In an early sign that a broad compromise would be hard to achieve, Greek President Karolos Papoulias’s plan to summon the heads of all leading parties for more negotiations yesterday was dropped after two leftist parties refused to attend.
However, the new prime minister would have a tough job merely getting Papandreou’s socialist PASOK party and the conservative New Democracy party of Samaras to work together, regardless of whether the leaders join the Cabinet.
“I’m afraid the new government will very soon turn out to be problematic,” conservative former finance minister Stefanos Manos told reporters.
“The new prime minister will ... not give the impression that he is in charge. Everyone will be looking to the two party leaders who will be running things behind the scenes,” he said, adding: “The civil service won’t implement any decision and everyone will be waiting for the election.”
Papademos, who as Bank of Greece governor oversaw the nation’s adoption of the euro in 2002, before moving to the European Central Bank, is a front runner as prime minister.
“The prime minister had several telephone contacts with Mr Papademos in the last days,” a senior government official told reporters.
At least the two parties agreed on the likely life of the coalition, deciding in the early hours of yesterday morning that Feb. 19 would be the preferred date — hours before Greek Finance Minister Evangelos Venizelos must explain Greece’s plans when he meets his eurozone peers at a meeting in Brussels.
Brussels has piled pressure on Athens to approve the bailout, a last financial lifeline for Greece, which faces big debt repayments next month, fearing that its crisis will spill into much bigger eurozone economies such as Italy and Spain — which would be far harder to rescue.
The coalition agreement came after the EU told the parties to explain by yesterday evening’s eurozone meeting how they would form a unity government to secure the 130 billion euro (US$180 billion) funding.
Greeks have suffered immensely in the two years that Papandreou has run the country. International lenders have demanded wave after wave of pay and pension cuts, plus tax increases and job losses in return for emergency aid. This has helped to keep Greece in four successive years of recession.
The Communist PAME labor group will hold a rally in Athens on Nov. 10 to oppose a new government that it said “has the task to save the monopolies and crush the popular movement.”
“They want to vote through the new bailout ... which will leave Greek people with their hands tied for many years,” the group said.
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