Greece’s creditors failed on Saturday to persuade the leader of the main conservative party to drop his refusal to sign a pledge that he will back austerity measures under a bailout deal aimed at saving the country from financial ruin.
Antonis Samaras, leader of New Democracy, one of three parties in a new national unity coalition struggling to avert a disastrous default, says there is no need to provide a written guarantee because his word can be trusted.
But international lenders, weary of Greece’s failure to deliver on fiscal targets during two years of financial crisis, insist on the written statement, fearing its politicians may otherwise try to wriggle out of their commitments, especially with an election likely in February.
Representatives of the European Commission, the European Central Bank and the International Monetary Fund - the “troika” which monitors Greek compliance with its rescue deals - discussed the issue with Samaras in Athens on Saturday. “Regarding the discussion we had with the troika and specifically on the written reassurances, I repeated to them my position the issue,” Samaras told reporters after the talks.
Samaras, a Harvard-educated economist known for his fiery rhetoric, said New Democracy had proven its commitment to the terms of the bailout by backing the coalition led by technocrat Prime Minister Lucas Papademos and its new budget.
Samaras’s stance potentially puts at risk the next aid tranche for Greece worth 8 billion euros (about $11 billion) that it needs by mid-December to meet debt repayments. Failure would mean default.
The new bailout negotiated last month envisages a further 130 billion euros meant to keep the Mediterranean country of 11 million people financed until 2014.
Greece’s debt troubles over the past two years have turned into a major European crisis that threatens the survival of the euro and the stability of the global economy.