Greece’s main political parties have decided to postpone by about two months the country’s early parliamentary elections to give the interim government more time to pass critical reforms, according to media reports Tuesday (December 27th).
Following former Prime Minister George Papandreou’s resignation in early November, the centre-left PASOK party, the conservative New Democracy (ND) party and the right-wing LAOS party agreed to form a coalition cabinet headed by technocrat Lucas Papademos. Under the deal, the country was to hold snap general elections, which were tentatively scheduled at the time for February 19th.
However, socialist Finance Minister Evangelos Venizelos reportedly told a PASOK meeting on Tuesday that the government’s political horizon has been clarified and that the date of the poll would be pushed back.
“Elections will take place after Easter, in late April,” wire services quoted him as telling the party’s political council during the discussion.
The ND, which was the one that insisted last month on the elections being held in February, also signalled on Tuesday that it was ready to agree to an extension of the interim government’s term. The party, however, wants the vote to be held by the Greek Orthodox Easter, which falls on April 15th this year.
“Any change to the agreed February 19th deadline depends on the debt swap talks,” Reuters quoted ND spokesman Yannis Michelakis as saying in remarks Tuesday on radio station Vima.
LAOS is said to also believe that the elections should be postponed so that the government gets more time to complete its task to conclude an agreement with Greece’s international lenders on the country’s second bailout since May 2010. The EU-led rescue package, worth 130 billion euros, would reduce the nation’s total debt burden to 120% of GDP by 2020, down from 160% of GDP today.
A critical element of the principle agreement the leaders of the 17-nation eurozone reached in late October is the so-called Private Sector Involvement (PSI) part, under which private banks and investors would have to take a 50% loss on their Greek holdings. What they would get in return for agreeing to write down billions of euros of Greek debt would be a mix of cash and new bonds.
To secure that second bailout from international lenders, Athens also needs to push through new structural reforms and fresh austerity measures on top of those it has approved since last year.
“The country is in a terrible condition,” the AP quoted Venizelos as saying. “Conditions of near recession set to prevail in Europe in 2012 will have an even greater negative affect on the Greek economy.”
The nation is in dire need of further international assistance to avoid defaulting on its sovereign debt, which would further destabilise the entire eurozone.
A report published on Greek daily Kathimerini’s online edition Wednesday cited German politician Wolfgang Bosbach as stressing that Athens must meet its commitments if it wants to secure continued aid payments.
“As long as it’s entirely unclear where Greece is going politically, the country can’t expect that further billion-euro aid is paid all the time,” the report quoted Bosbach, a member of Chancellor Angela Merkel’s Christian Democratic Union, as saying in an interview with Bild-Zeitung.