IN WHAT is expected to be a 100-day mandate, the new government of Lucas Papademos, technocrat turned prime minister, must implement the latest €130b bail-out package if Greece is to stay in the euro. It must also pass the 2012 budget and draw on the next €8b of bail-out money, without which pensions and salaries cannot be funded past mid-December. Is it sufficiently broad-shouldered to do so?
At first glance the answer is yes. Most of George Papandreou’s Panhellenic Socialist Movement (Pasok) government ministers and deputies have kept their posts in the coalition which now includes six members of the opposition New Democracy party and four from the rightwing LAOS party, bringing the total up to an excessive 48. Evangelos Venizelos has stayed on as finance minister along with both his deputies. Yiannis Mourmouras, a former economic advisor to Antonis Samaras, the leader of New Democracy, has also joined their team. The two opposition vice-presidents, Stavros Dimas and Dimitris Avramopoulos, have been appointed to the key foreign and defense ministries, acting as a guarantee that New Democracy will support the unity government. Makis Vorides, a LAOS MP and lawyer, has the ministry of infrastructure and transport. He is expected to continue the work on opening up professions like taxi drivers, a measure he has previously opposed on multiple occasions.
Yet the government is not as unified as it looks. None of the six New Democracy coalition members are actually MPs for the party. Mr Avramopoulos, who was previously an MP, resigned before taking up his new post. With grudging support from New Democracy the coalition’s legitimacy is fragile. It took less than a week in office for the new government to be undermined. In an effort to keep the nationalist elements of his party happy, Mr Samaras has refused to sign a letter committing him to the bail-out terms, arguing that his word should be enough and that the demand for a written commitment is "humiliating". Yet his signature, along with that of the premier, the other two party leaders and the Greek central bank governor is required by the European Commission in order to proceed with the bail-out.
Urging him to sign the letter, Mr Papademos said that this hissy fit could "derail the bail-out plan" stressing that this is not a question of whether one’s word is enough but a means of reassuring taxpayers abroad that Greece is committed to the latest bail-out. Tensions with the Commission and Eurogroup have since risen. Unless Mr Samaras plans on taking responsibility for a disorderly Greek default he will, sooner or later, cave in.
The two main parties are also split. Some New Democracy MPs oppose the coalition and have criticised Mr Samaras for agreeing on the latest bail-out plan. They wish for immediate elections. Other more liberal party members support the coalition and have criticised any attempts to undermine it. Sotiris Chatzigakis, one of New Democracy’s oldest members, said on Monday that ‘there are far-right micro droplets in the party operating under the banner of the popular right’ accusing Mr Samaras of succumbing to their pressure. He was expelled from the party shortly after. Meanwhile things in Pasok also look grim. Since Mr Papandreou’s referendum announcement, which robbed Greece of its remaining credibility, party unity has tumbled. Many MPs have already teamed up behind Mr Venizelos to lead the party in the next election and are calling for Mr Papandreou to resign. Andreas Loverdos, the health minister, is another popular choice among Pasok MPs.
Nobody yet knows exactly when elections will actually take place. But with plummeting approval rates, what is certain is that neither Pasok nor New Democracy are looking at a parliamentary majority any time soon. MPs from both parties will have to get used to governing together, whether they like it or not.
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