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Greece's PM: Reforms top priority, not early elections

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By The Associated Press
Thursday, June 20, 2013, 9:36 p.m.

ATHENS — Greece's prime minister said on Friday that he's determined to avoid early elections despite a deep rift with a coalition ally — threatening new political instability in the bailed-out country and prompting warnings from international creditors.

One year into his mandate as head of a three-party coalition formed to stave off financial collapse, Antonis Samaras said his overriding priority is to persevere with reforms demanded to keep Greece's rescue loans flowing.

“We have three years left — and we will see them through,” Samaras said in a televised live address.

The political crisis was sparked by Samaras' unpopular decision last week to yank the state-run broadcaster ERT off the air to save money — axing all 2,656 jobs. Both his center-left minority partners objected strongly, but matters came to a head late Thursday when the Democratic Left Party rejected a compromise that the Socialist Pasok Party accepted.

“I want us to proceed all together, as we started,” Samaras said after the negotiations broke down. “But I will forge ahead in any case.”

With the Socialist Pasok on board, Samaras' conservatives have a slim parliamentary majority that would allow the government to pass key reforms — including the pledged sackings of some 15,000 public-sector employees by 2015. It was not immediately clear whether the Democratic Left Party will remain in the coalition.

Austerity inspectors from the European Union and the International Monetary Fund are in the course of reviewing Greece's progress with reforms. The inspectors will return to Athens by early July.

The European Union's top economics official, Olli Rehn, said the ball is in Greece's court.

“It is very important that the Greek government and the administration identify the technical work on the fiscal policies and the structural reforms that need to be adopted before the review can be completed,” he said after a meeting of eurozone finance ministers in Luxembourg late Thursday.

Rehn argued that recent stability in Greece has yielded encouraging signs of a recovery for the recession-mired economy.

“I do hope for the sake of the Greek people that this stability will be preserved,” he said. “I want to appeal to the sense of responsibility of political leaders in Greece.”

IMF spokesman Gerry Rice warned that Greece has just over a month to deliver quickly with pledged reforms to ensure smooth release of bailout payments.

“If the review is concluded by the end of July, as expected, no financing problems will arise because the program is financed till end-July 2014,” he said.

ERT, whose workforce costs have been considerably trimmed over the past three years, is funded by obligatory contributions from all Greeks — whether they own a TV set or not — and by advertising revenue. After years of murky finances, the corporation is now turning a modest profit, and critics argue that sacking its entire workforce makes no financial sense, particularly as the state budget will have to bear the cost of compensating all laid-off workers.

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