Saturday 23 September 2017

Reform calls grow louder as Greece's coalition on the brink

Nicholas Paphitis Athens

Greece's fragile coalition government was teetering on the brink but still standing after a junior party decided to pull its two ministers from the cabinet following a row over the unpopular closure of state broadcaster ERT.

The setback hammered shares on the Athens stock exchange and drew urgent appeals from the country's creditors for stability and swift reform implementation.

Concerns about Greece also sent Europe's stock markets falling, with Germany's DAX dropping 1.24 percent.

Democratic Left pulled out of conservative Prime Minister Antonis Samaras's year-old coalition, withdrawing two cabinet ministers and promising only qualified support in parliament – a move that leaves the government with a slim majority.

The news raised further fears over Greece's bailout programme. The country has been pledged €240bn in bailout loans – but only on the condition that it introduced strict spending cuts and reforms.

INEFFICIENT

So far there are already delays on a pledged overhaul of the state and the inefficient tax system, liberalising markets and further cutting spending.

Further political chaos could hamper the promised austerity measures.

Yesterday the EU's top economics official, Olli Rehn, urged Greek leaders to concentrate on "policy rather than politics".

"It would be very important to stabilise the political situation in Greece now. Immediately. And really concentrate all energy on implementation of the programme to meet the milestones," Mr Rehn said.

Mr Samaras's coalition allies failed to resolve the dispute over ERT – whose defiant staff is continuing unauthorised broadcasts – following three meetings this week and a high court ruling that the decision to close it unlawful.

The shutdown shocked Greeks, prompting protests outside the ERT headquarters in Athens, and was criticised abroad as a blow to press freedoms and democracy.

The conservative-led administration, formed to stave off bankruptcy after a previous coalition folded last year, has been left with two members after the rift with Democratic Left late on Thursday.

Irish Independent

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