The moment of truth for government partners

The "flight forward" that prime minister Antonis Samaras decided on today by announcing the end of negotiations with the Troika, coupled with severe turbulence caused in the co-governing parties in the forthcoming three critical votes, on privatizations tomorrow, on the agreed measures with our lenders next week, and finally on the 2013 state budget at the end of next week, endengers serious political complications of an unknown outcome.

The PM’s decision surprised the two ND government partners, as it came at a time of ongoing meetings at PASOK and DIMAR, the leaders of which are looking for ways to convince their members who disagree or are cautious about the measures.

PASOK president Evangelos Venizelos described the initiative of Maximos Mansion, which was announced at a time when heavy clouds amassed over his party, as "unfortunate".

"We were the first to speak about matters of national responsibility and crisis management. So the others must be careful about how they are handling these issues now that everything is at a crucial point," he said, adding "so when Samaras announces the completion of negotiations on measures and the budget he obviously means the conclusion of the discussions with the Troika."

He also explained the two outstanding issues, despite the prime minister's announcement:

-       all that is related to the internal balance of the fiscal measures depends on critical special arrangements to be clarified in the implementation law. There is room for improvement until the vote in parliament without altering the budgetary target

-       the important matters of extension, sustainability of state debt, and social and developmental counterweights will be judged at the end of the critical Eurogroup meeting between Greece and its institutional partners on 12/11.

So Venizelos reached the conclusion that "the crucial political negotiation is not only not finished, but is in full swing and we urge the government to do its best to take advantage of all national forces and seek the best possible result at the end of the critical meeting."

Responding to Venizelos, government spokesman Simos Kedikoglou said the government could not participate in tomorrow's Eurogroup teleconference without finalizing the new measures. "The Eurogroup could not decide either on debt sustainability or on the extension of the fiscal program, if we had do not finalized the measures. Venizelos is well aware of this."

The prime minister's announcement was greeted with bewilderment by the DMAR leadership as well, while it was looking for a way to combine the "no" to labour measures with Kouvelis’ desire for the party’ to remain in the ruling coalition.

This was preceded by disagreements at the meeting of the PASOK parliamentary group, where party members such as Kostas Skandalidis expressed their direct opposition to the suggestion earlier by Venizelos about voting in favor of the measures.

The latest developments are "mixing the deck" in the government camp and now all options are open. Although currently there doesn’t seem to be a risk of not passing the measures of agreement with the Troika, the backdrop of political instability that is being created does not herald the longevity of the existing tripartite coalition.