October 30, 2012 / 7:04 PM / 6 years ago

Greek coalition allies snub PM's appeal on austerity

ATHENS (Reuters) - The Greek prime minister’s appeal for a united front to push through more austerity fell on deaf ears on Tuesday, with one ally promising to vote against reforms and another scolding him for prematurely saying talks had ended.

A flurry of contradictory statements from the three parties in Greece’s ruling coalition highlighted the chaos ahead of a crucial vote on austerity measures, which is turning into the government’s biggest test since taking power in June.

Near-bankrupt Greece needs to push through spending cuts and tax measures worth 13.5 billion euros as well as a raft of reforms to appease EU and IMF lenders and secure bailout money needed to avoid running out of cash next month.

But a deal has been held up by the small Democratic Left party’s refusal to back labor reforms, which has tempted other lawmakers to defect and leaves the government facing an unpredictable vote in parliament next week.

After months of negotiations on the austerity plan, Prime Minister Antonis Samaras announced on Tuesday that talks had been completed and implored his allies to back the package.

“What would happen if the deal isn’t passed and the country is led to chaos?” Samaras said in a statement.

“Such dangers must be avoided. That is the responsibility of each party and every lawmaker individually.”

The Democratic Left party immediately responded by reiterating it would vote against labor reforms.

“The Democratic Left has fought on the issue of labor relations, to protect workers’ rights which have been already weakened,” the party said in statement.

“It does not agree with the result of the negotiations. The Democratic Left sticks to its position.”

The other junior partner in Samaras’s coalition, the Socialist PASOK, then interrupted a party meeting to put out a statement chiding Samaras for saying talks had concluded.

“A rushed press release that says ‘the government did what it could, it is moving ahead and whoever wants to should follow it’ ... is at best unfortunate,” the party’s chief said in the statement.

NUMBERS GAME

The once-mighty Socialists, who have seen their support evaporate in the face of continued austerity, have also criticized the labor reforms but have not explicitly said how they will vote. The party has hinted it will vote in favor, to preserve political stability.

The government is expected to include a large chunk of the austerity measures in the 2013 budget bill to be presented on Wednesday, with the remaining measures and labor reforms in a separate bill to be put to parliament on Monday.

The bickering among the allies threatens to bring next week’s vote down to a numbers game, undermining Samaras’s pledge that Greece’s government is committed to doing everything it can to restore credibility in the eyes of European partners.

The Democratic Left party has the support of 16 deputies in the 300-seat parliament, meaning the government - which has a 176-seat majority - could pass the reforms without its support as long as PASOK deputies vote in favor.

But the smaller party’s stance has emboldened some in PASOK and speculation has grown that some rebel lawmakers could vote against the measures. The austerity bill could be defeated if more than 10 of the 33 PASOK lawmakers oppose them.

The government also faces a contentious vote on a privatizations bill on Wednesday which could set the tone for the bigger vote next week.

The proposed law intends to scrap the government’s obligation to own a minimum stake in a string of former state companies, but PASOK and Democratic Left deputies have demanded all privatizations be subject to parliamentary approval.

A Democratic Left official said the party would abstain on the entire privatization bill and vote against certain articles.

Euro zone finance ministers are due to hold a conference call on Greece on Wednesday, ahead of a November 12 meeting that is expected to focus on the debt-laden nation’s latest crisis.

Writing by Deepa Babington; Editing by Robin Pomeroy

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