The Greek "Chicken or Egg Problem" Emerges: No Resignation Without Coalition Government; And Vice Versa

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With Greece once again likely to dominate newsflow, the question of whether G-Pap will step aside, as he promised, will be one everyone will demand to see answered. Especially Europe. As Reuters reports, "the European Union turned up the heat on bickering Greek politicians on Sunday to agree a crisis coalition, demanding progress towards backing an international bailout deal in the next 24 hours. In a sign that Greece's political deadlock may be easing under EU pressure, a senior socialist said Prime Minister George Papandreou had made clear he would resign once a coalition deal was done, possibly as soon as Sunday night." Yet the career politician has pulled the last gambit and has thrown the "coalition" government choice straight in the arms of his nemesis, New Democracy's Antonis Samaras, and the president: "Greek Prime Minister George Papandreou has asked the president to host talks between himself and opposition leader Antonis Samaras after a Sunday cabinet meeting, a source at the prime minister's office quoted the premier as telling his cabinet." In other words, if nothing is resolved, G-Pap can tell a furious Europe, "we tried" and blame the opposition, in yet another attempt to win political brownie point. The time, however, is short for a final solution: "With euro zone finance ministers due to meet on Monday, senior socialist lawmaker Telemachos Hitiris said: "Everything must be done within the day, otherwise tomorrow it will be hell." How many times have we heard that before. And it very well may be hell, however it will no longer come from Greece but from Italy, whose 10 Year bonds closed at the lowest price ever and where a margin raise by LCH now appears imminent, making another step function move lower almost inevitable. Either way, Greece will be fun to watch as all the hopium has been spent and no more cans can be kicked.

From Reuters:

Greece had breached confidence with its euro zone partners last week and put itself on a path towards leaving the common currency, Rehn said in a telephone interview.

 

Papandreou provoked uproar on Monday by announcing a referendum on the bailout, which demands yet more austerity to be imposed on the long-suffering Greek population, plunging his country into political as well as economic crisis.

 

Under heavy pressure from home and abroad, Papandreou ditched the referendum and narrowly survived a confidence vote, but only after promising to seek a new broad-based coalition. Rehn said Greece now appeared to be pulling back from the brink.

 

Early on Sunday, the left and right had seemed far apart and any coalition deal between Papandreou's PASOK socialists and the conservative New Democracy a distant prospect.

 

But the EU pressure appeared to start working. With the cabinet due to meet later on Sunday, Hitiris said explicitly what Papandreou had signalled in parliament on Friday.

Even the president is now sick of G-Pap's endless politics:

In the hunt for a national consensus, President Karolos Papoulias met the conservative opposition leader on Sunday.

 

"This uncertainty that is torturing the Greek people must end. We must find a solution," Papoulias said before starting closed-door talks with New Democracy leader Antonis Samaras.

 

Samaras said he was ready for compromise but only with a new prime minister. "I am determined to help. Provided that Papandreou resigns, everything will take its course," he said after the talks.

In other words, we now have a classical chicken or the egg syndrome, where G-Pap will not resign until he has a coalition government, something Samaras refuses to do with G-Pap still in charge, and on the other hand, Samaras will not participate in a coalition government until G-Pap resigns.

As for Greek sentiment, perhaps this one taxi driver summarizes it best:

"Europeans don't trust us anymore, they will throw us out," said Tassos Pagonis, a 48-year-old Athens taxi driver. "I hope we don't return to the drachma."

And perhaps not. Keep an eye on those riot cams.