Greece names technocrat cabinet to prepare for new vote

Agence France-Presse
Greece's political limbo has sent the euro and European stock markets plunging, with little guarantee that the new vote set for June 17 will produce a viable government that will implement a massive EU-IMF rescue package

ATHENS, France (AFP) – Greece Thursday, May 17, unveiled a caretaker cabinet of technocrats tasked with organizing the cash-strapped nation’s second elections just six weeks after an inconclusive vote sent jitters across the eurozone.

The temporary team led by 67-year-old Panagiotis Pikrammenos, the head of Greece’s top administrative court, is made up of mainly prominent university professors, a retired general and a respected diplomat.

Greece’s political limbo has sent the euro and European stock markets plunging, with little guarantee that the new vote set for June 17 will produce a viable government that will implement a massive EU-IMF rescue package.

European markets were mainly lower again early Thursday, with Athens down 1.2 percent, although the euro recovered from four-month lows hit Wednesday.

Officials from the European Union and the International Monetary Fund, which are all that stands between Greece and a disorderly debt default — and a possible exit from the euro currency zone — have warned that no new funds will be released if progress on pledged reforms falters.

Caretaker administration

Greece’s new cabinet was sworn in Thursday, with George Zannias, formerly head of the state’s council of economic advisors and a key negotiator in Greece’s landmark debt rollover, appointed finance minister.

Petros Molyviatis, an 83-year-old retired diplomat, returns to head the foreign ministry after a stint in 2004-2006, while Greece’s former head of the army general staff Frangos Frangoulis has been named defense minister.

The caretaker administration was appointed after Greece’s political parties failed to cobble together a coalition following the May 6 elections which saw a voter backlash against austerity and in which no clear victor emerged.

“The new battle begins,” conservative New Democracy chief Antonis Samaras told party cadres. “It will determine whether Greece will remain in Europe, a Europe that is itself changing.”

Many Greeks are in despair after two years of salary and pension sacrifices which have failed to bring the promised economic benefits, triggering strikes and sometimes violent protests.

Radical left-wing party Syriza, which is vehemently opposed to what it brands “barbaric” austerity measures and has threatened to tear up the bailout deal, is a favorite to win after coming second in the May 6 election.

Syriza’s 37-year-old leader Alexis Tsipras on Wednesday accused the EU and Chancellor Angela Merkel of European paymaster Germany of “playing poker with European people’s lives”.

Tsipras told the BBC that if the “disease of austerity destroys Greece, it will spread to the rest of Europe”.

The turmoil has raised fears among Greece’s international creditors that structural reforms pledged in return for the latest 240-billion euro ($300 billion) bailout will delayed or even scuppered.

Growing paralysis

“It is clear to all that our homeland is going through difficult times. We must safeguard its prestige and assure a smooth transition,” Pikrammenos said Wednesday.

In a sign of the growing paralysis, the Greek agency overseeing state asset sales — another condition for international funds — on Wednesday suspended its operations until a fully fledged government is in place.

News that about 700 million euros ($890 million) was withdrawn from Greek banks on Monday has added to the jitters, with investors fearful a Greek euro exit would be chaotic for everyone.

And British Prime Minister David Cameron will on Thursday renew his call for eurozone leaders to take decisive action or face the break up of the single currency over the Greek debt crisis.

There was little comfort found in a pledge by German Chancellor Angela Merkel, made alongside new French President Francois Hollande at their first meeting Tuesday, that “we want Greece to stay in the euro”.

Merkel said the two European powerhouses were also prepared “to study the possibility of additional growth measures in Greece” if Athens sought them.

But German Finance Minister Wolfgang Schaeuble insisted once again it was not possible to renegotiate the EU-IMF deal, the second in two years aimed at averting bankruptcy.

“Greece must be ready to accept the (EU-IMF) aid,” he said. “Those who win the elections will have to decide if they accept the conditions or not.”

The euro was trading at $1.2744 in Asia after hitting a four-year low of $1.2681 Wednesday. – John Hadoulis, Agence France-Presse

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