Antonis Samaras, Greece’s prime minister
Why did Greek prime minister Antonis Samaras call a snap presidential election?
The government wants to put an end to weeks of political uncertainty, which has sent spreads on Greek bonds soaring, blocking Athens from borrowing on international markets and damaging confidence in a Greek economic recovery. Mr Samaras is betting he can round up 180 MPs to vote for his government’s candidate and avert a general election that the radical opposition Syriza would almost certainly win. That would give him another year to finish his four-year term and a chance to put Greece on the road to sustained growth.
Will the government get the 180 votes?
It will be a close-run contest. Mr Samaras’s centre-right New Democracy party and its socialist coalition partner Pasok can muster only 155 votes between them. They expect to win the support of 16 or 17 independent MPs who left the coalition because they opposed specific bailout reforms, but will have to lobby hard for the remaining 8 or 9 votes among deputies from the rightwing Independent Greeks party and the moderate Democratic Left, which split from the governing coalition last year.
What does this mean for Greece’s bailout?
Greece was given a two-month extension of the current bailout at Monday’s meeting of eurozone finance ministers so that it can implement further tough measures including tax rises and pension cuts before agreeing separate precautionary credit lines from the EU and International Monetary Fund. A successful presidential election could accelerate economic reforms, while a snap general election won by Syriza would be likely to disrupt relations with international lenders who would confront a new government led by fiercely anti-bailout politicians.
How has Syriza reacted?
Syriza welcomed Mr Samaras’s decision, saying it would enable Greeks to escape earlier from the punishing four-year bailout as the government would fail to elect a president. It said the government and the troika of international bailout monitors — the European Commission, the European Central Bank and the International Monetary Fund — agreed to bring the presidential vote forward out of “desperation”.
Is Syriza really as scary as the government suggests?
Alexis Tsipras, the party leader, is trying hard to not to frighten undecided Greek voters. His approval ratings are approaching those of Mr Samaras as he moderates his anti-bailout rhetoric and reassures investors their money would be safe with a Syriza government in power. Promises to increase the minimum wage by 50 per cent, provide free heating and electricity for impoverished Greeks and create more public sector jobs have given Syriza a 4-9 percentage point lead in opinion polls. But many Greeks worry that Mr Tsipras’s threats to halt payments on Greece’s debt might provoke a stand-off with lenders prompting a bank run and, perhaps, a Cypriot-style bail-in whereby savers could lose part of their deposits.
Could Greece survive without a bailout agreement?
Not for long. The government has a big enough financial reserve to meet debt repayments in the first half of 2015 but would struggle to roll over short-term domestic debt if there was an outright break with the troika. Greek banks would face difficulty borrowing from the European Central Bank, renewing the squeeze on liquidity for the private sector. The surge in bond spreads after Mr Samaras announced his plan to end the IMF programme a year ahead of schedule made clear how much Greece will need the support of international lenders for the foreseeable future.
Was this a stroke of political genius by Mr Samaras or a sign of desperation?
Mr Samaras has appeared increasingly frustrated by what he calls the “way the troika moves the goalposts” in the bailout negotiations. And Syriza’s victory in the European parliament elections last May and strong lead in opinion polls ever since has put the premier on the defensive with his own party. If Mr Samaras’s gamble on the presidential election pays off, the government will be able to seal a new agreement with lenders and keep Syriza at bay for another year.
source: http://www.ft.com
STUDIO 3 NEWCASTLE AUSTRALIA 