Bloomberg News

Greece Keeping Euro Is Only Choice for Country, Papademos Says

November 16, 2011

(See EXT4 <GO> for debt crisis news.)

Nov. 15 (Bloomberg) -- Greek Prime Minister Lucas Papademos, charged with securing international financing to avert a collapse of the economy, said keeping the euro is the only way forward for the country.

“Our membership of the euro is a guarantee of monetary stability and creates the right conditions for sustainable growth,” Papademos told lawmakers late yesterday at the start of a three-day debate on a confidence motion in his new government. “Our membership of the euro is the only choice.”

Papademos formed a government on Nov. 11 after four days of political wrangling. It must implement budget measures and decisions related to an Oct. 26 European bailout amounting to 130 billion euros ($177 billion), as well as manage a voluntary debt swap, by the end of February.

The immediate priority is securing the payment of an 8 billion-euro loan installment under a previous 110 billion-euro European Union-led rescue, Papademos said. The tranche must be paid before the middle of December to prevent a collapse of the country’s economy.

Greece plans to sell 1 billion euros of 13-week Treasury bills today, the only financing it’s getting that isn’t coming from the EU and International Monetary Fund.

Transitional Power

Papademos’s appointment was agreed by former Prime Minister George Papandreou of the Pasok socialist party, opposition New Democracy leader Antonis Samaras and anti-immigrant LAOS party leader George Karatzaferis.

Samaras said yesterday that backing for the interim government should last no more than the three months needed to secure the financing before elections are held.

“The danger is that this is a really transitional service government, a pre-electoral government that will do all the right things to secure the loan but will be unable to promote the real reforms,” Yannos Papantoniou, a former finance and economy minister in a previous Pasok government.

Disbursement of funds was halted by German Chancellor Angela Merkel and French President Nicolas Sarkozy after Papandreou called a referendum on the second European bailout terms, roiling markets and angering Greeks and EU partners.

German Stance

German Finance Minister Wolfgang Schaeuble yesterday said Merkel’s government wants Greece to remain a member of the euro region. Her Christian Democratic Union party at the same time voted to allow euro states to quit the currency area.

“We want Greece to stay in it, that everybody stays in it,” Schaeuble said in an interview on Phoenix television. “We also want to help them to stay in it. But if a country can’t carry the burden or doesn’t want to carry the burden, and the Greek people have to carry a heavy load, then we have to respect the decision of this country.”

Papademos told lawmakers there was a clear commitment from EU partners to provide financing as long as the country proceeded with structural reforms and austerity measures.

The 64-year-old premier is seeking a vote of confidence in his government from the parliament’s 300 lawmakers. The vote is expected to be held on Nov. 16.

“Our task is disproportionately great in relation to the time we have at our disposal,” he said in his speech.

‘Faceless Powers’

A written pledge required by the EU from the government and opposition leaders to implement those reforms isn’t a “demand from faceless powers and organizations,” he said. It expresses the “demands and expectations of people and taxpayers in countries which directly and indirectly support us,” he said, responding to opposition leader Samaras, who repeated yesterday he wouldn’t sign a separate letter.

A small team of officials from the European Commission, the IMF and the European Central Bank is likely to visit Athens soon to discuss matters with the Greek government and political parties, European Commission spokesman Amadeu Altafaj said.

“We still have to wait to get a clear and unequivocal written statement about the commitments to be undertaken by the Greek authorities” regarding the Oct. 26 deal, Altafaj said yesterday. There’s no deadline for these commitments, which need to be offered “as quickly as possible” to restore confidence.

The government plans to put the final touches to the 2012 budget as well this week.

Greece’s biggest public and private sector union groups will hold a general strike on the as yet unspecified day the 2012 budget is being voted in parliament, Costas Tsikrikas, chairman of public sector union ADEDY, told reporters yesterday. Public employees will also hold a work stoppage from midday today to protest against job and pay cuts.


“We may have a new government with Papademos as prime minister, who says he’s not a politician but a technocrat, but in reality he’s being called to make political decisions that will greatly affect the lives of people,” Tsikrikas said.

A majority of Greeks say Papademos was the right choice to lead the interim government and that elections should be held later than currently envisioned in mid-February, according a poll published in Athens-based Ethnos newspaper.

Of the 952 households polled by Marc SA from Nov. 10-11, 79 percent approved of Papademos. When asked if the government’s term should last longer, 54 percent agreed, while 76 percent said it should make important decisions during its term.

--With assistance from Marcus Bensasson and Tom Stoukas in Athens and Jim Brunsden in Brussels. Editors: Rodney Jefferson, Kevin Costelloe

To contact the reporters on this story: Tom Stoukas in Athens at; Maria Petrakis at

To contact the editor responsible for this story: John Fraher at

The Aging of Abercrombie & Fitch
blog comments powered by Disqus