Early Greek vote threatens state funds

GMT 14:46 2014 Monday ,15 December

Arab Today, arab today Early Greek vote threatens state funds

Greek euro coins
Athens - AFP

Cash-strapped Greece could face a funding shortage if early elections are held in the middle of delicate negotiations with EU-IMF creditors, the country's finance minister warned Monday.
Failure to elect a president in a process starting Wednesday would bring a snap poll and Greece could face a "significant" financing gap, Gikas Hardouvelis said.
"If there is no government...there will be a significant financing gap," Hardouvelis told Naftemboriki daily.
"The gap is manageable until February...but requirements increase from March onwards."
According to the International Monetary Fund, Greece will require some 10 billion euros ($12.5 billion euros) this coming year.
And early polls are a real possibility by February given the balance of power in parliament.
They would be held in the middle of fiscal talks with EU-IMF creditors in which Greece hopes to negotiate some 7.0 billion euros in loans, Hardouvelis said.
Analysts have warned that the embattled government of conservative Prime Minister Antonis Samaras will be hard-pushed to elect a president.
In a note on Friday, ratings agency Moody's said an early election would be a "credit negative event" for Greece.
Government spokeswoman Sofia Voultepsi said Monday: "We have been warned by ratings agencies that early elections would constitute a credit event."
She later added that the government "has safeguarded the country against any danger."
The parliamentary vote for a new president originally was supposed to be held in February, but brought forward to December 17 by the government.
Samaras said this was to remove political uncertainty at a time Greece is locked in negotiations with its international creditors over its latest budget and fiscal reforms for the coming year.
The government, which has a slim lead of 155 MPs in the 300-seat chamber, needs to muster 200 MPs in the first two rounds of voting to elect its candidate, former EU Environment Commissioner Stavros Dimas.
In a third or final round that would take place December 29 it would need 180 MPs.
The prospect of early elections has alarmed financial markets and last week caused Greek stocks to slide dramatically, with the Athens stock exchange index losing about a fifth of its value.
European Economic Affairs Commissioner Pierre Moscovici flies to Athens on Monday for a two-day visit to support to the government.
Last week, European Commission President Jean-Claude Juncker warned that an early poll could see "extreme forces" take power in the crisis-hit country, referring to radical leftist party Syriza, which has a steady lead in opinion polls.
"I think the Greeks ... know very well what a wrong election result would mean for Greece and the eurozone," Juncker said on Austrian TV. "There is a chance that the helm of the country could be taken by extreme forces."
Syriza leader Alexis Tsipras, a 40-year-old former Communist, has pledged to raise wages and pensions, halt privatisations and re-negotiate Greece's bailout agreement with the EU-IMF creditors.


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