Setback for Greek PM as deputy minister resigns

VOTE OF CONFIDENCE:JUST OVER 12 hours after his new three-party government received a comfortable vote of confidence from MPs, the Greek prime minister Antonis Samaras suffered an embarrassing setback yesterday after one of his deputy ministers resigned.

Nikos Nikolopoulos, the deputy labour, social security and welfare minister, said he was leaving the government because it had failed to press the troika for changes to the terms of the country’s memorandum package.

“My personal belief [is] that the issue of renegotiating with the troika, as well as the correction of significant distortions in labour, pension, social security and welfare issues, should have been emphatically placed on the table at the start of the discussion,” said Mr Nikolopoulos, the third minister to resign since the government was formed on June 21st.

Troika inspectors over the weekend reportedly insisted that a 12 per cent wage cut for judges, public-sector doctors, military officers, professors and Orthodox bishops be implemented, despite government attempts to exempt these groups.

On Sunday the new government won the support of all 179 MPs from the three parties backing it – New Democracy, Pasok and the Democratic Left – with the other four parties in the 300-member assembly voting against.

Announcing his government’s programme, Mr Samaras made it clear that he would seek to implement key aspects of the memorandum before attempting any renegotiation of its terms.

His government intends to speed up privatisation of state companies and real estate and the merger of state agencies.

“We see privatisation as a growth tool,” Mr Samaras told MPs. “Whoever takes control of state assets must make investments. We cannot cut wages and pensions while public real estate lies dormant.”

However, he said changes to the bailout programme would ultimately be necessary if Greece is to reach its memorandum targets.

“What needs to change is that which is hampering us from attaining the targets. We want to fight the recession.”

The personnel problems that have beset his nascent government will fuel doubts about the government’s political cohesion, however.

“The signal being sent to Greeks and Brussels is that something is going wrong within the government,” said George Tzogopoulos, an analyst at the Eliamep think tank.

He suggested that Mr Samaras’s pre-election pledges to renegotiate the bailout terms were now coming back to haunt him.

“Ministers have been misled or misinformed about the real prospect for sincere renegotiation, an idea that was only used for domestic audiences,” Mr Tzogopoulos added. “There now seems to be a serious communication problem between Mr Samaras and his ministers and MPs.”