Under the proposed deal, Papademos, 64, a respected former vice president of the European Central Bank, would lead Greece until February elections. But European hopes dimmed Tuesday that the two antagonistic political parties could work together to resolve the country’s debt crisis. Already, politicians appeared to be jockeying for advantage in the upcoming elections by avoiding too close an association with the unpopular bailout plan.
“I believe that we are now close to an agreement with New Democracy,” the main opposition party, Prime Minister George Papandreou said Tuesday at what may have been his final cabinet meeting. Papandreou has pledged to resign as soon as the new government is announced, and he bade farewell to his ministers at the meeting, the newspaper Athens News reported.
But European leaders asked Papandreou’s Socialist party and the conservative New Democracy party to provide written assurances that they support the Oct. 27 bailout plan and would implement it. The plan would give Greece an additional $180 billion in exchange for tough austerity reforms that were unpopular enough to topple the current government.
Finland’s Olli Rehn, the European commissioner for economic and financial affairs, said Greece would not receive an $11 billion bailout installment until the assurances were in hand.
The demand brought an angry response from Antonis Samaras, the New Democracy leader, and it was holding up the conclusion of the deal, according to Greek news accounts.
“There is national dignity,” Samaras said in a statement Tuesday. He called the bailout plan “inevitable” and said, “I do not allow anyone to cast doubt on these statements.”
Samaras has tried to avoid naming any of his party’s members to cabinet posts, preferring to steer clear of association with the austerity measures. But a source close to the Greek cabinet said Papandreou was insisting that both parties be responsible for implementing the measures.
Greece needs bailout money before Dec. 15 or it will go bankrupt, officials have said.
Staff writer Steven Mufson in Washington contributed to this report.