ATHENS: International lenders have welcomed a written pledge from Greece’s conservative party leader to back austerity measures, the prime minister was quoted as saying Thursday, a move that should unlock loans needed to avoid national bankruptcy.
In a further boost for technocrat Prime Minister Lucas Papademos, a Cabinet minister said the lenders would send a troika mission back to Athens next month to hold talks on Greece’s new 130 billion euro bailout plan.
The European Union and International Monetary Fund have said leaders of all three parties in Papademos’ national unity government must provide a written pledge that they will back the austerity measures in return for more financial aid.
Antonis Samaras, leader of the conservative New Democracy party, had balked at the demand before sending a letter to the creditors Wednesday.
“Papademos told the Cabinet the content of the letter was satisfactory. There is an initial positive response to it [from abroad],” the government minister said on condition of anonymity.
In his letter, Samaras said he supported Papademos’ government and Greece’s bailout plan, though he also repeated his call for changing some economic policies demanded as a condition of the plan.
Samaras, a Harvard-educated economist, wants to change the policy mix to allow Greece’s economy to start growing again after four years of recession exacerbated by tax hikes, spending cuts and reductions in wages and pensions.
Without the 8 billion euro tranche – the sixth installment of a 2010 bailout worth a total 110 billion euros – Greece will run out of money next month, defaulting on its debts and raising the prospect of a messy exit from the eurozone.
EU leaders have insisted on the written pledge that Greece’s political leaders will continue backing the bailout plan beyond the life of Papademos’ interim government because they fear the parties involved will otherwise try to wriggle out of their commitments.
An election has been penciled in for Feb. 19.
Opinion polls suggest Samaras’ party will win most votes but not enough for them to form an overall parliamentary majority.
The Papademos government, confirmed in office last week, is pushing an austerity budget through parliament and has pledged more structural economic reforms despite stiff resistance from labor unions who staged new protests Thursday.
The troika – comprising representatives of the European Commission, the European Central Bank and the IMF – will arrive in Athens on Dec. 12, the government minister said, four days after parliament is scheduled to approve the 2012 budget.
The troika last visited Greece last week to establish initial contacts with the new government of Papademos, who is a former vice president of the ECB with no political experience.
Earlier Thursday, in a sign of the challenges facing Papademos in reforming a country already in its fourth year of recession, riot police clashed with trade unionists protesting against a new property tax.
Police arrested 15 people, including the leader of the GENOP labor union, for obstructing access to an office of Greece’s biggest power company PPC. The firm is charged with collecting the property tax via electricity bills.
“We will not back down in our struggle. This fight is about the whole of Greek society. It is about not cutting power to the homes of the poor, the unemployed, the pensioners,” Nikos Fotopoulos, head of GENOP, said before being detained and taken to a public prosecutor.
“The fight will continue till the end. This law will become invalid in practice, with the help of all the people.”
GENOP, which represents power workers and has close links to the Socialist PASOK party serving in the coalition government, have disrupted operations at the PPC data processing center since Sunday by blocking the entrance to the offices.
Having PPC collect the new property tax with electricity bills makes it harder for people to avoid paying it in a country known for tax evasion and also brings the risk of their power being cut off. However, the government has said it has no plans to cut electricity to impoverished nonpayers for now.
Public sector unions representing about half a million workers halted work for two hours Thursday in protest against the austerity measures and the draft budget.
They were expected to march to the Portuguese Embassy in Athens to show solidarity with workers in Portugal, who staged a general strike Thursday against tough cuts there aimed at meeting EU-imposed budget goals.
Greek private and public sector unions plan a national strike on Dec. 1.
GENOP is one of Greece’s most hard-line labor unions. In recent years it has held strikes that have disrupted electricity supplies and scuppered government plans to sell a stake in or find strategic private partners for PPC.