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Greek coalition government unveiled Greek coalition government unveiled
(about 4 hours later)
A new coalition government has been announced in Greece, as eurozone finance ministers met in Luxembourg. The sole aim of Greece's new coalition government is "to save" the crisis-hit country and ensure it remains anchored to Europe, prime minister Antonis Samaras said in a televised speech to his cabinet on Thursday.
Warning that he would personally chart the progress ministers were making, the conservative leader said good intentions were not enough to rescue a nation grappling with its worst crisis in modern times. "Our goal is to get the country out of the crisis and to have the sacrifices people have made pay off," he said. "This is a government of responsibility, a government that is here to make big changes."
He announced that cabinet members would take an immediate 30% cut in earnings to set an example.
The new government was unveiled before a meeting of eurozone finance ministers at which Athens signalled it would raise the issue of amending terms attached to rescue funds from the EU and IMF.
Exhausted by weeks of political paralysis following inconclusive elections on 6 May, Greeks have reacted with relief, with some returning deposits to banks.
The centre-right New Democracy party came out on top in a run-off poll held last Sunday but failed to clinch an outright majority. Under intense pressure from foreign lenders, the country's squabbling political elite put differences aside to create a three-party alliance led by the conservatives. Junior partners include the socialist Pasok and small Democratic Left parties.
In a surprise move, Vassilis Rapanos, a renowned economist with a radical past as an anti-junta activist, was given the post of finance minister.In a surprise move, Vassilis Rapanos, a renowned economist with a radical past as an anti-junta activist, was given the post of finance minister.
With the country's future in the eurozone hanging in the balance despite the elevation to power of pro-European parties in Athens, Rapanos's appointment was greeted with enthusiasm. With the country's future in the eurozone hanging in the balance despite the elevation to power of pro-European forces in Athens, some greeted the choice with enthusiasm. "He's absolutely right for the post – he's one of the best we have," said Pandelis Kapsis, a government spokesman in the emergency administration led by Lucas Papademos, a technocrat banker, until last month.
"He's absolutely right for the post, he's one of the best we have," said Pandelis Kapsis, a prominent political commentator who served as spokesman for the emergency administration lead by Lucas Papademos until last month. "As chairman of the National Bank of Greece he knows how the banking system works but he also has a great deal of experience and knowledge of our country's public finances," insisted Kapsis, a prominent political commentator.
"As chairman of the National Bank of Greece he knows how the banking system works but he also has a great deal of experience and knowledge of our country's public finances," Kapsis said. But while the politics of compromise have been on display in Athens in recent days, the new 38-member cabinet was dominated by New Democrats after the two minority partners agreed that their MPs would support the government but not participate in it.
The cabinet's appointment was met with relief among Greeks exhausted by weeks of political paralysis since inconclusive elections in May. On Sunday the centre-right New Democracy party came out on top in fresh elections but failed to clinch an outright majority. With the exception of 13 technocrats, including Rapanos, who were appointed at the behest of the junior parties, all were well-known conservative politicians. In a bid to allay fears that the government marked a return to the old order – widely blamed for the economic mismanagement that created the country's financial mess – Samaras ensured that several were either young or untried.
Under intense pressure from foreign lenders keeping the economy afloat, Greece's squabbling political elite put differences aside to create a three-party alliance led by the conservatives under the new prime minister, Antonis Samaras. The 61-year-old leader, who convened the cabinet meeting within minutes of the ministers being sworn in, said the national unity government would fulfil its four-year-term. But he takes over a poisoned chalice. The country's fourth prime minister since November, Samaras must appease Greeks who are despairing of internationally mandated austerity, while meeting the commitments Athens has signed up to in exchange for financial assistance. A powerful opposition in the form of the virulently anti-austerity far-left Syriza party is bound to stoke passions further.
The 38-strong cabinet was dominated by New Democrats after its two minority partners, Pasok and Democratic Left, agreed their MPs would support the government but not participate in it. As congratulatory telegrams poured in – the German chancellor Angela Merkel was first to praise Samaras on his victory – few envied him. Berlin, which has bankrolled most of the two bailout programs that have propped up the Greek economy since May 2010, has made it clear that punishing reforms will have to be made if Athens is to continue receiving funds. Foreign creditors have called on Greece to make €12bn in further spending cuts next month.
With the exception of three ministers, including Rapanos, who were appointed at the behest of the junior parties, all were well known conservative politicians. In an attempt to allay fears that the government marked a return to the old order, several members were young and untried. All three parties in the new government want to renegotiate the bailout accord – putting the country, once again, on a potential collision course with creditors. A statement released on Thursday said the alliance aimed "to revise terms of the loan agreement without endangering the country's European course and its place in the euro".
Samaras, who was to convene the cabinet's first meeting after a swearing-in ceremony, said he expected the administration would be long-lived and fulfil its four-year term. He faces a high-wire act of appeasing Greeks who despair of austerity measures and meeting the commitments Athens has signed up to in exchange for financial assistance. Officials said Giorgos Zanias, the outgoing finance minister who will represent Greece at tonight's euro group meeting in Luxembourg, would speak of the need to "amend" the controversial austerity measures citing fears over the country's descent into social chaos and collapse if the recession-hit nation is pushed too hard.
Berlin, which has bankrolled most of the two bailout programmes that have propped up the Greek economy since May 2010, has made clear that punishing reforms will have to be made if Athens is to continue receiving funds. Foreign creditors have called on Greece to enact €12bn in further spending cuts next month. "The secret to this government surviving will be trust among the three partners," said Dimitris Keridis, professor of political science at Athens' Panteion University. "If they fragment, the only beneficiary will be Syriza. It won't be easy in a political culture that is, anyway, not used to coalitions and in a country that faces such tough decisions."
All three parties in the new government want to renegotiate the bailout accord, once again putting Greece on a potential collision course with creditors. Officials said Giorgos Zanias, the outgoing finance minister who represented Greece at Thursday's euro group meeting in Luxembourg, would raise the issue of amending the austerity measures, citing fears of a descent into social chaos and collapse if Greeks are pushed too hard.
Dimitris Keridis, professor of political science at Panteion University in Athens, said: "The secret to this government surviving will be trust among the three partners. If they fragment the only beneficiary will be [the main opposition] Syriza. It won't be easy in a political culture that is not used to coalitions and in a country that faces such tough decisions."