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Thursday, June 21, 2012

Antonis Samaras appointed Greece's prime minister

Three-party coalition cabinet expected as PM pledges to honour bailout commitments

After weeks of political uncertainty casting doubt over its future in the eurozone, Greece took its first tentative step towards regaining stability as Antonis Samaras, the conservative New Democracy leader and winner of Sunday's election, was appointed prime minister.

He was sworn in before the country's spiritual leader, Archbishop Ieronymos, after agreement was reached on the formation of a coalition government that will also include the Socialist Pasok and small Democratic Left parties.

"I will demand that the new government … works hard so that we can offer tangible hope to our people," Samaras said, as he emerged from the presidential palace where the ceremony took place. "With God's help we will do whatever is in our hands to get out of this crisis earlier."

In a rare move, the Harvard-educated Samaras took office before his cabinet was announced. Officials hoped the step would "send a message" to markets and foreign governments that crisis-hit Greece was finally reclaiming the equilibrium that has eluded it since inconclusive elections on 6 May.

"We wanted to send a message to markets and foreign governments that we have a leader and tomorrow we will have a government," one insider told the Guardian. "We didn't want to protract the sense of instability and insecurity. We wanted to show that … step by step, day by day, stability is returning to Greece."

Aides close to the conservative leader said they expected the new cabinet to be officially unveiled on Thursday.

With Athens teetering on the edge of bankruptcy, social breakdown and decay, there will be no honeymoon for the new government.

The 61-year-old Samaras has his work cut out with an in-tray few leaders would envy. His first priority will be to ensure that rescue funds agreed under a €130bn (£104bn) EU-IMF sponsored financial assistance package for Greece, keep flowing into an economy whose reserves are set to dry up by mid July.

Samaras, whose party emerged as the frontrunner in the weekend election but with not enough votes to form a government on its own, attempted to allay fears that Athens would fail to meet its obligations. "We will honour our commitments," he insisted in a short victory speech given on Sunday.

But relief at the politics of compromise on display in Athens has also been tainted with concern over what the new government will ask. Samaras, who has flip-flopped since Europe's debt crisis erupted in Athens in late 2009, has openly said he wants to "renegotiate" the loan agreement.

Although agreed in record time in a country of deep political divisions, the tri-party coalition is an uneasy alliance that not only faces a formidable opposition from far-left radicals bent on quashing austerity measures but is also fraught with tension.

Within minutes of the new government being announced, the far-left Syriza party promised it would be "at the forefront of the social battles in the next phase".

In a foretaste of the potential friction, both Pasok and the Democratic Left said their MPs would jointly support the conservative-led administration but not actively participate in it.

Their refusal quickly spawned speculation that both parties will seek to distance themselves from government policy when popular discontent over internationally mandated belt-tightening re-erupts.

Athens is under intense pressure from creditors to implement a further €12bn in spending cuts by July.

Prior to the new government being announced, the Pasok leader, Evangelos Venizelos, said its top priority would be the formation of "a national team" to wage the "big battle" of revising the loan accord. "Our first test will be the EU summit on June 28," he said.

The Democratic Left leader, Fotis Kouvelis, went further, insisting that the only way forward was to "disengage" from the commitments and "lift those measures that have literally bled Greek society".

"What we have is a hybrid government with two centres of power, one in and one outside," said an insider requesting anonymity because he did not want to be seen thwarting the new administration's chances of survival before it had assumed office. "Very soon it will have to take very unpopular measures for which a very strong stomach will be required by all involved. My fear is that as soon as the going gets tough the two [left-wing] parties will distance themselves and the coalition will collapse."

With time of the essence in placating international concern over Greece's place in the eurozone, Samaras met with his coalition partners and the outgoing finance minister, Giorgos Zanias, to discuss the economy before Thursday's euro group meeting in Brussels. Vassilis Rapanos, a highly regarded economist and chairman of the National Bank of Greece, also attended with officials, saying he would replace Zanias when the new government is formally announced on Thursday.


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