Wednesday

27th Sep 2023

Greece urged to uphold austerity as coalition talks begin

  • Merkel. Greece must approve €11.5bn of cuts before the end of June despite its political mess (Photo: consilium.europa.eu)

EU leaders have made it clear that Greece has to stick to pre-agreed spending cuts even after around two thirds of the population voted for anti-austerity parties in Sunday's (6 May) election.

With Greece still digesting the results of a vote which brought seven parties into parliament, ranging from the Communists to the far-right Golden Dawn, both Brussels and Berlin have underlined that the terms of the bail-outs are not up for negotiation.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Angela Merkel of Germany, which put the most money towards the two Greek rescues, said it was of the "utmost importance" that Athens sticks to the reform programme - a programme which has already seen welfare and incomes slashed and which has been widely blamed for a sharp drop in GDP and a sharp increase in unemployment.

The European Commission had the same message.

Amadeu Altafaj Tardio, a spokesperson for economic affairs commissioner Olli Rehn, reminded Greeks that "solidarity is a two-way street." He added: "We think Greece must remain a member of the euro but everybody has to carry his responsibilities here."

It is likely to be some time before Greece's political future becomes clear, in developments with profound implications for its continued membership of the euro.

Antonis Samaras, leader of the centre-right New Democracy, which received the largest share of votes on 19 percent, has been tasked with forming a government. He has three days to succeed.

If he fails, Alexis Tsipras, leader of radical left Syriza (16.77%), will attempt to do the same. The coalition-forming baton will eventually go to Evangelos Venizelos of the centre-left Pasok (13.9%) if he also fails.

If there is no outcome from the coalition-forming attempts, the president will get all seven party leaders together to try and form a coalition. A failure at this stage would mean a caretaker government to take the country into fresh elections.

Over and beyond the domestic timetable is the bail-out timetable. The Greek parliament has to approve a further €11.5 billion in cuts by end of June in order to comply with the strings-attached to EU-International-Monetary-Fund money.

With all the parties scoring relatively poorly in the elections - for the establishment pro-austerity New Democracy and Pasok parties it was, in comparison to previous votes, an electoral wipe-out - the government-forming task has become even more difficult.

In addition to overcoming reform programme differences, some of the parties are likely to be considered beyond the pale when it comes to government-forming, such as the neo-facist Golden Dawn.

In a further complication, Merkel herself - the person who has the most say over EU policies and the chief architect of the pro-austerity model - is in a tight spot.

Germany's most populous state - North Rhine Westphalia - goes to the polls on 13 May, one week after the ruling coalition suffered a set-back in the small state of Schleswig-Holstein.

The pending vote leaves Merkel with little room for manoeuvre in the coming days when it comes to questions of Greece's reform programme.

The same applies to concessions on adjusting the EU's recent fiscal compact treaty, one of the main demands of France's newly-elected Socialist president Francois Hollande.

Speaking on Monday, Merkel said the pact "was not up for debate."

German parliament agrees second bail-out for Greece

The German parliament on Monday approved a second bail-out for Greece, despite hearing from Chancellor Angela Merkel that there is no absolute guarantee it will work. However, the symbolic 'chancellor's majority' was not achieved.

Radical left and neo-Nazis score well in Greek elections

Greek voters have punished the two ruling parties responsible for the last EU bail-out by giving the radical left the second highest number of votes and allowing a neo-Nazi party into the legislature for the first time.

First coalition attempt fails in Greece

Greek Conservatives failed to cobble together a coalition on Monday, with leftist leader Alexis Tsipras set to try and form a government opposing the "barbaric" bail-out, a move that would put into question the country's future in the eurozone.

Germany: eurozone would survive Greek exit

German finance minister Wolfgang Schauble has said the eurozone would survive if Greece left it, with the single currency structures more resilient than two years ago.

Opinion

How do you make embarrassing EU documents 'disappear'?

The EU Commission's new magic formula for avoiding scrutiny is simple. You declare the documents in question to be "short-lived correspondence for a preliminary exchange of views" and thus exempt them from being logged in the official inventory.

Column

Will Poles vote for the end of democracy?

International media must make clear that these are not fair, democratic elections. The flawed race should be the story at least as much as the race itself.

Latest News

  1. EU Ombudsman warns of 'new normal' of crisis decision-making
  2. How do you make embarrassing EU documents 'disappear'?
  3. Resurgent Fico hopes for Slovak comeback at Saturday's election
  4. EU and US urge Azerbijan to allow aid access to Armenians
  5. EU warns of Russian 'mass manipulation' as elections loom
  6. Blocking minority of EU states risks derailing asylum overhaul
  7. Will Poles vote for the end of democracy?
  8. IEA says: Go green now, save €11 trillion later

Stakeholders' Highlights

  1. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  2. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  3. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  4. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us