ATHENS, Greece — Greece’s junior coalition leader defied European demands to provide written support for a massive new debt relief deal, leaving the country’s loan lifeline in doubt hours before its new government was to outline its policy platform.
Conservative party leader Antonis Samaras insisted Monday that his verbal pledge to back the deal should suffice for Greece’s European partners to release an (euro) 8 billion loan installment, without which the government will run out of cash before Christmas.
“Some say that to unblock the ((euro) 8 billion) installment we need to sign a joint statement with all the parties that support this new transitional government,” Samaras told his New Democracy party lawmakers. “I said it before and I say it now: I will not sign such statements.”
Greece depends on loans from a (euro) 110 billion ($150 billion) rescue package agreed in 2010, when huge borrowing costs blocked the debt-crippled country from international markets.
That package later proved inadequate, forcing the new bailout agreed on Oct. 26 that will also see the reduction of the country’s privately held debt by some (euro) 100 billion, or 50 percent.
The European Union insists Samaras must sign off on the new deal, together with other senior Greek officials.
“We continue to wait for a clear and unequivocal expression — in writing — about the engagement of the responsible political forces in Greece to the decisions taken on Oct. 26,” said Amadeu Altafaj Tardio, a spokesman for the EU’s Monetary Affairs Commissioner Olli Rehn.
The apparent deadlock overshadows the key policy presentation in parliament later Monday by the new premier Lucas Papademos. His painstakingly formed interim coalition faces a vote of confidence on Wednesday, which it is expected to easily win.
Papademos, 64, is a former central banker picked by broad party consensus last week after the previous Socialist government imploded. Backed by the Socialists, Samaras’ conservatives and a small right-wing nationalist party, he has a mandate to coast the austerity-fatigued country over the next three months until national elections in February.
The government must pass the 2012 austerity budget, approve the new (euro) 130 billion ($177 billion) international bailout cobbled together last month and see through lagging reforms that will include thousands of public sector layoffs.
Athens is expected to officially launch talks in the next few days with banks and other private bond holders for the debt writedown provided under the new deal deal.
Meanwhile, Greece’s international debt inspectors — officials from the Commission, the ECB and the IMF — are set to travel to Athens very soon for discussions with the government and hopefully all major political parties, Altafaj Tardio said.
Greeks have suffered some 20 months of harsh austerity, with repeated pension and salary cuts compounded by a spate of tax increases. Unions have reacted with a wave of general strikes and demonstrations, many of which led to riots. A small left-wing party has called an anti-austerity protest just ahead of Papademos’ speech in parliament, while civil servants will hold work stoppages Tuesday.
However, Greeks appear relieved by the formation of the new government last Friday, after ten days of political wrangling triggered by the resignation of Socialist prime minister George Papandreou amid a party revolt halfway through his four-year term.
Some 73 percent back Papademos’ selection according to a survey in Sunday’s To Vima newspaper, and 78 percent approved the coalition government. But only 26 percent said they expected the three parties to support the government’s work, with 56 percent voicing fears that the parties will focus on campaigning for February’s elections. The Nov. 11 poll of 1,000 people gave a 3 percent margin of error.
Derek Gatopoulos in Athens and Gabriele Steinhauser in Brussels contributed to this report.