Greek crisis

Greek 'Unity Government' Effectively Collapsed Already

Mish’s Global Economic Analysis,

19 November, 2011

‘The very instant the Greek "Unity Government" formed it was divided. Antonis Samaras, the leader of Greece’s New Democracy Party, one of the three coalition parties that formed the government says he will not sign a document demanded by the IMF before it will release the next tranche.

That's not all, Samaras actually wants to rework the agreement. Neither will fly (at least with Greece receiving the next tranche of money), and tensions fester.

Bloomberg reports Samaras Won’t Sign Pledge Committing to EU’s Greek Debt Accord

"Antonis Samaras, leader of Greece’s New Democracy Party, won’t sign a document pledging his commitment to the Oct. 26 European Union agreement for the nation, the Athens News Agency reported.

"Samaras, whose party is a member of the country’s unity government, told officials from the so-called troika of the European Union, the International Monetary Fund and the European Central Bank that he has already taken five actions that show his party’s full commitment to the agreement, the state-run news agency said."

Is this posturing? If so, what is the gain? I think he will sign, or the New Democracy Party will take the blame for the collapse.  The situation is even messier than a signing agreement.

Samaras Wants Rollbacks of  Austerity Measures He Disagrees With

Athens News comments Troika back in town

"The interim government took a first step on Friday towards meeting terms of an international bailout needed to avoid bankruptcy, submitting a budget bill that foresees no new austerity measures next year as long as reforms are enacted.

"But more importantly, however, was the rift between parties in technocrat Prime Minister Lucas Papademos's unity coalition caused by jockeying for position by the New Democracy party ahead of an election slated for February 19.

"Papademos must win pledges from the rival parties that they will do what it takes to meet bailout terms or Greece's lenders will withhold an 8bl euro aid tranche Athens needs to dodge default next month, plus longer-term financing later.

"Samaras said on Thursday said he wanted to win an outright majority in the snap election to reverse the austerity measures he disagrees with. Although publicly committed to coalition, he has distanced himself while still being seen to be taking part for the sake of keeping Greece's creditors on side.

"On Friday his party repeated an oft-made call to scrap the austerity measures prescribed under the bailout, known as the "Memorandum" in Greece, in favour of pro-growth policies.

"The Memorandum needs to be renegotiated. A recipe that doesn't work needs to be changed," it said in a statement. "

These coalition "unity" governments in both Greece and Italy are struggling already, and over things that would seem to be a given like signing a document that appears to be a formality to what has been agreed upon.

Is signing a document such a big deal? It might be if the intent is to roll back the agreement.

The Greek "Unity" government has effectively collapsed already.