Greece in turmoil as politicians feud over way ahead

Demo: anti-austerity protesters face police at a student march in Greece, where debt has caused turmoil on the world markets Read more: http://www.belfasttelegraph.co.uk/news/world-news/greece-in-turmoil-as-politicians-feud-over-way-ahead-16073945.html#ixzz1czmSwjkR

Efforts to agree a new government for Greece and save the country from spiralling out of the eurozone continued late into last night in Athens.

The EU has put Greece under intense pressure to agree an emergency coalition that could deliver broad support for an international rescue deal to prevent a potentially disastrous default.

World leaders and financial markets have watched for the past week as feuding Greek politicians have refused to make a deal over a national unity government. Greece’s prime minister George Papandreou — whose disastrous gamble on a euro referendum sent shockwaves through world markets — had not stepped down last night, despite promises to do so.

Opposition leader Antonis Samaras has said he will support the bailout deal but has refused to join a transitional government until the resignation of Mr Papandreou, whom he has accused of being “dangerous” and a “liar”.

The premier won a narrow vote of confidence on Friday and seemed ready to step down and let his finance minister, Evangelos Venizelos, lead a new government. But squabbling between the two main parties over the timing of national elections and the departure of the prime ,inister has left the country in a stalemate.

The ruling socialists, Pasok, want to avoid elections as opinion polls suggest they would lose very badly. Conversely, the opposition New Democracy are keen for polls to go ahead before they can be tainted by being part of an administration that would have to implement painful and unpopular cuts.

Greeks face a choice between austerity inside the euro or ejection from the single currency and the EU which would further damage the economy. The vast majority of Greeks support the euro option, despite two years of austerity measures, which have failed to alleviate Greece’s debt burden.

what now?

l EU finance ministers meet in Brussels today and Greece’s representative will have some tough questions to answer.

l The final terms of the bailout agreed on October 26 need to be settled before it can be put before the Greek parliament. EU leaders have made it clear that the measures will need to be supported by at least 180 of Greece’s 300 MPs.\[e.hagan\]l A date must be set for fresh elections with Greece’s two main parties between them languishing at around 50% in opinion polls. Support is growing for smaller parties, including nearly 14% in recent surveys for the communist party.

l By mid-November the next €8bn of EU bailout money will be needed by Athens to pay its bills. If the EU is not satisfied, the loans will be blocked and the country declared bankrupt.

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