Everyone had hoped Greek politicians would agree to form a new government within quick time after the weekend’s parliamentary elections. Originally, the expectation was that a government would be settled on Monday. Then on Tuesday, once that deadline had passed, everyone was saying there would be news by the end of the day. But haggling continues, and now an announcement isn’t tipped until Wednesday afternoon (local time). All the more remarkable is that everyone now knows the rough composition of the new government. The centre-right New Democracy party will draw on the support of two centre-left parties: Pasok (its traditional rival) and Democratic Left (a minor party). So why are the final details proving so difficult to lock down?
As Karen Maley reports, although the three parties broadly agree that the conditions imposed on Greece by the European Union, European Central Bank and International Monetary Fund (the ‘troika’ that have funded the country’s bailout), they disagree on what would be tolerable. Of the three, the Democratic Left is likely to be the most strident, which could make the negotiations led by the presumptive prime minister, New Democracy’s Antonis Samaras, much harder than he would like. Pasok, for its part, just seems to be posturing about the role they should play, reckoning that their international contacts will allow them to pull some strings. (Although no explanation has been offered as to why this strategy didn’t work when they were originally negotiating the bailout terms.)
Against the murky politics is the clear economic reality that the Greek government is running out of money. Without action soon, Athens won’t be able to pay its public servants or those claiming government pensions. Maley says that Samaras’ chief priority will be to lengthen the time that Greece is allowed to reach its agreed targets. In effect, a two-year extension would mean a further €16 billion would have to be handed over to Greece. That’s unlikely to be welcomed by Germany and other creditors. They’ll probably still hand over the cash — but don’t expect them to be smiling while they do so.