Deal on new Greek PM falls through

By Kerin Hope in Athens

Getty Antonis Samaras

Greece’s political crisis deepened on Wednesday after Antonis Samaras, the conservative opposition leader, stormed out of a meeting with Carolos Papoulias, the president, amid disagreement over the appointment of a coalition premier.

Mr Samaras left after a deal to give the premiership to the speaker of parliament fell through at the last moment. Several other possible candidates were mentioned by George Papandreou, the departing Socialist prime minister, after the talks had started, according to a person with knowledge of the discussions.

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The presidency said another meeting would be held at 10am on Thursday.

Mr Papandreou had delivered a statement announcing his socialist government’s resignation to make way for a new coalition government but did not name a successor.

Philippos Petsalnikos, speaker of parliament and a former justice minister, was poised to become premier, having emerged as a compromise candidate after fierce infighting inside the PanHellenic Socialist Movement over the candidacy of Lucas Papademos, a former European Central Bank vice-president.

But Mr Papandreou reportedly reintroduced Mr Papademos’s candidacy, along with that of Evangelos Venizelos, the finance minister.

Mr Samaras, leader of the conservative New Democracy party, later said he would be happy with either of Mr Papandreou’s nominations for the premiership but he did not want to be drawn into Pasok infighting.

The new cabinet, which is expected to serve until an early election is held on February 19 was still likely to be dominated by socialists, one official said.

Mr Papademos, a former academic who was once governor of the Bank of Greece, had been tipped as the most suitable person to implement the country’s new €130bn bail-out.

But his candidacy had been undermined by Evangelos Venizelos, the ambitious socialist finance minister, who would have been sidelined if Mr Papademos took over.

Mr Papademos, a visiting professor at Harvard’s Kennedy school of government, flew to Athens on Monday but has not spoken publicly about his candidacy. He could not be reached for comment.

Anxiety mounted among Greek politicians and bankers as the delays continued.

Talks between Mr Papandreou and Mr Samaras have taken place intermittently since Sunday. They have missed two successive deadlines for announcing the new government.

”Any delay in forming a new government threatens to damage further the country’s credibility,” George Provopoulos, central bank governor, told the Financial Times.

It was essential that a strong coalition government pursued the policies that would ensure Greece’s place within the euro area, he added.

Several pro-reform politicians came out in favour of Mr Papademos, saying Greece needed a “person of international stature” to support its adjustment effort.

“We need a prime minister with authority and a strong record both inside and outside the country, with deep knowledge of economics who is equipped to carry out the October 27 [bail-out] agreement,” said Anna Diamantopoulou, the departing education minister.

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Deal on new Greek PM falls through - FT.com