GREEK CRISIS: Now PASOK joins Souvelis in withdrawing Coalition support

Venizelos…squeezing out of the door

 Yesterday afternoon Pasok leaders told Greek Finance Minister Yannis Stournaras that they will join the Souvelis-led Democratic Left Party in refusing to support any law giving way to the Troika’s demands for the repeal of labour laws, the marriage allowance, and government job cuts. I am also told that collective bargaining laws and an open MP veto of certain privatisations remain as sticking points.

Over the weekend, the Thursday IMF presentation to junior finance ministers was re-happened (in that the Commission stopped denying its existence). Somewhere along the line, however, there has been a degree of confusion about what the IMF would say – Antonis Samaras still claims he thought the presentation would be positive – and it remains obvious that Berlin and Draghi decided, during Tuesday, that they didn’t buy into the agreement.

“I think what happened was that the speed of events gave Berlin the jitters,” says one reliable source, “What’s not entirely clear is why that was”.

Other sources are clear about the why:

“The Troika was all smiles Sunday, but then went away and wrote up something completely different. What they wanted was for the progress to stall. This is all about waiting until after Obama gets re-elected before chucking Greece out of the eurozone”, said another.

I have to say, this theory doesn’t work for me: surely, if stalling was the game, you’d write an equivocal report now, and then a more damning one after November 6th? Also -White House pressure or not – both Berlin and the ECB would greatly prefer a deal with Greece to a messy exit while we still have the Spanish crisis on our hands.

Either way – as I noted last Friday – within 24 hours Samaras may well lack the Parliamentary mandate to do any deal, good or bad. Brussels is losing control of this one, and I cannot see an easy solution to it.

Stay tuned.