Greek coalition haggling drags on into a third day

Julian Harris
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NEGOTIATIONS between key Greek politicians have spilled into a third day, as pro-bailout parties attempt to form a fresh coalition.

Evangelos Venizelos, head of the socialist Pasok party, said that he hoped a deal could be struck after lunchtime today. A three-way coalition with the election winners – the conservative New Democracy group – and the Democratic Left party appears to be on the cards.

Following the formation of a new government, talks are expected to resume on a renegotiation of the conditions attached to the country’s bailout package from Brussels.

A senior Eurozone official said yesterday that Greece could be cut some slack.

“Anybody who would say that we need not, and cannot renegotiate the MoU [memo of understanding] is delusional, because he, or she, would be under the understanding that the whole programme, the whole process, has remained completely on track ever since the weeks before the Greek first election,” the official said.

“Because the economic situation has changed, the situation of tax receipts has changed, the rhythm of implementation of the milestones has changed, the rhythm of privatisation has changed, if we were not to change the MoU, it does not work,” he said.

“We would be signing off on an illusion. So we have to sit down with our Greek colleagues and say: this is where we should be in July, and this is where we are in July, and there is a delta. Let’s find out what the delta is and then how to deal with the delta – that is a new MoU,” the official said.

Greece secured a second, €130bn bailout package in February from Europe and the International Monetary Fund, but an inconclusive general election in May and last week’s return to the ballot box delayed the implementation of the conditions attached to the bailout.

The US government, the largest IMF member, has said that it supports discussions to review the Greek bailout programme.