The coming 20 days are considered critical for Greece, as the time is running out for the adoption and implementation of the toughest decisions since 1970s.
The next 48 hours will show if a consensus is achievable on two levels: regarding internal party and main opposition. The answers are expected on Monday at the cabinet’s meeting and on Tuesday during a series of meetings between the Prime Minister and political leaders (besides the leader of the communist party).
It is significant that George Papandreou convenes a cabinet meeting without the medium-term package being completed, as negotiations with the troika unit will continue at least until the end of the week. The members of the government will be informed about the “hot” issues of the package, which are the privatizations and the additional €6b measures in 2011, focusing on new taxes and staff dismissals in the public sector.
Every minister has to give an unambiguous answer whether they agree of not, so that the Prime Minister will have a clear picture. Recent strong reactions by top ministers have raised an issue of internal consensus.
The team of George Papandreou estimates that interministerial reactions fuel the undesired sentiment in the ruling party, as a large amount of lawmakers object to the measures. However, no direct warnings have been reported yet, there is a likelihood of some lawmakers to vote against the package.
Meanwhile, the main opposition insists on refusing a national consensus for the whole package, which provides the continuing of a policy “that has failed totally and perpetuates the vicious circle of recession”.
Despite heavy pressures (particularly from abroad) New Democracy leader Antonis Samaras insists on agreeing on specific provisions of the medium-term package, but not as a whole, and asks for an immediate revision of the Memorandum of Understanding.
The decision on dismissal in the broader public sector has reached a critical point: New Democracy leadership states that its reactions are not based on populist reasons but because it believes that massive dismissals would launch unemployment and give the final blow to the pension funds.
ND officials speak of an “attack of friendship” recently in order to offer a political consensus, adding that they would not be surprised if George Papandreou would adopt ND’s proposals at the cabinet meeting.
Meanwhile, the government’s economic team has examined the financial proposals of ND and leaked that it would accept some important aspects concerning the legitimacy of the arbitrary buildings, repatriation of capital, ways of development of real estate assets and privatizations.
However, it doesn’t agree with the reduction of tax rates, which ND considers as the cornerstone of its plan.
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