Sinking with no captain - The Best from Greece

 

A government official said last night that the new Greek interim government would be announced on this afternoon.

 

The humiliating demand by EU Economic and Monetary Affairs Commissioner Olli Rehn that the next tranche of loans will not be disbursed unless New Democracy leader Antonis Samaras signs a declaration that he will support full implementation of the October 27 bailout threw his party into a tailspin.

 

The demand came a day after ND issued a nonpaper saying that the party will support the new government’s policies, only to reverse them when the conservatives come to power.

 

Designed to beat Samaras into complete submission, Rehn’s demand triggered an uproar in the ND party base, which was already enraged by the party leader’s decision to vote for the bailout terms that he had been blasting for over a year.

 

The declaration must also be signed, Rehn said, by outgoing Premier George Papandreou, the incoming premier and finance minister, and the Bank of Greece governor. The declaration will be a vow to fully implement the October 27 bailout.

 

Two main issues seem to be the stumbling blocks delaying a final deal. The key issue is whether Pasok and New Democracy will allow George Papandreou’s successor, if he is not a politician, to wield the full authority of the premiership, without partisan interventions that can undermine the effectiveness of the new government.

 

A refusal to do so will constitute overwhelming proof that the two main coalition partners want a puppet government that will serve as a vehicle to restore their battered image and bolster their electoral outlook.

 

The term of the new government expires when general elections are held, after it takes all necessary actions to ensure that the October 27 bailout deal is fully implemented.

 

That is why Papademos, a former European Central Bank vice-president, reportedly set firm conditions – including a longer term than the mid-February deadline initially agreed to by Pasok and New Democracy – in order to assume the premiership and make certain that the new government has the best possible chances of achieving its aims.

 

Papademos appeared determined to wield the full span of prime ministerial powers, including the right to appoint ministers holding portfolios involving key structural reforms demanded by Greece’s lenders. Those reportedly include the ministries of finance, labour and development.

 

While early reports had Papademos wanting to replace Evangelos Venizelos as finance minister, later reports in the wee hours on November 9 stated that Venizelos had blocked Papademos’ candidacy.

 

Unconfirmed reports indicated that Papademos wants to appoint to the cabinet former Pasok ministers Tassos Yannitsis (currently the head of Hellenic Petroleum), Alekos Papadopoulos, and Yiorgos Floridis (who recently co-founded a think tank called Social Link that some believe aspires to become a political party). All three have in the past fought lonely battles for fiscal discipline and have earned a reputation as effective administrators.

 

Efforts to establish a functioning coalition, with a real prime minister, will be complicated by the fact that both Pasok and New Democracy, aside from pushing the paramount aim of saving Greece’s bailout and long term participation in the eurozone, are both struggling for political survival.

 

The brutal austerity programme imposed by Greece’s lenders has already decimated Pasok’s base of political support.

 

ND leader Antonis Samaras’ recent agreement to vote for the October 27 bailout has demolished his anti-memorandum platform in one fell swoop, and it is tearing apart both his party base and his parliamentary group.

 

That is why Samaras had for days been reluctant to appoint ND deputies to the new government.

 

The wrangling within and between parties on the evening of November 8 produced a new round of rumoured candidacies for the premiership, including that of parliamentary speaker Filippos Petsalnikos. Such rumours showed that the deal with Papademos had not closed.

 

The fact that Apostolos Kaklamanis – a former longtime parliament speaker under Pasok governments – held talks with Papandreou and Venizelos fuelled rumours that Papandreou might be weighing an alternative candidacy.

 

Kaklamanis had leaked earlier on November 8 that Papademos was no longer in the running, but nobody confirmed that by midnight, and Kaklamanis denied he said that exactly.

 

New Democracy would not confirm reports that it had vetoed Venizelos’ participation in the government.

 

The same occurred after Papandreou received Panagiotis Roumeliotis – Greece’s representative to the IMF, who has also been touted as a possible candidate for the premiership – in the premier’s office in parliament.

 

One thing is certain. Papandreou said over four days ago that he would resign, but he is still in office.