Greece poised for coalition government to weather storm of austerity

Published on 20/06/2012 01:36

A COALITION government could be formed by this evening in Greece, the head of the Greek socialist party said last night.

Evangelos Venizelos’ socialist Pasok party came third in Sunday’s elections.

However, at the core of any administration will be Antonis Samaras’ conservative New Democracy party, which came first, taking 129 of parliament’s 300 seats – short of the 151 needed to govern alone.

The radical left Syriza party took second place, with 71 seats, but has refused to join any government that will implement the terms of Greece’s international bail-out, under which it has received billions of euros in rescue loans in return for unpopular cuts and tax hikes.

Mr Venizelos, who handled Greece’s negotiations with its creditors for several months last year when finance minister, said the government would have the support of the election winner, Pasok and the small Democratic Left party of Fotis Kouvelis, which won 17 seats.

“With Syriza’s refusal, the only practical solution is the creation of a government with the support of New Democracy, Pasok, and the Democratic Left,” he said after hours of talks.

He added: “This government must be formed as soon as possible. This can be achieved by midday [today].”

His party, he said, “will support this government sincerely and will participate in it in the most beneficial way in order to make it effective and credible”.

Pasok MPs would gather today to define how they would participate in the government, he said. “The most important issue is not the government’s composition, but the national negotiating team that will strive to achieve the best possible revision of the loan agreement so that we can counter the recession and unemployment and to bring positive growth and jobs,” he added.

Although numerically Mr Samaras could form a government with just Pasok, which has 33 seats, he has been seeking a broader alliance, seen as potentially more stable and better able to weather the continuing storm of austerity measures taken in return for bail-out funds.

Such a government would broadly fulfil Greece’s pledges to its bail-out creditors for further cutbacks and reforms, keeping it within the eurozone single currency regime.