Second Coalition Leader in Greece Backs Debt-Relief Deal

 

By NIKI KITSANTONIS Published: November 23, 2011

ATHENS — After refusing to do so for weeks, the leader of New Democracy, the second-largest party in Greece’s interim government, sent a letter to the country’s foreign creditors on Wednesday pledging to support a debt-relief deal. But it was not clear whether the move would break a political deadlock that was preventing Greece from receiving badly needed rescue funds.

Without that $10.7 billion — the sixth installment under a rescue deal that was approved last year — Greece is likely to default on some of its debts in December, which would shake the euro zone.

Foreign lenders have insisted that the leaders of all three parties in the new unity government — including Antonis Samaras of New Democracy — make a written commitment to the second bailout deal. Mr. Samaras, who sharply criticized the terms of the deal before the formation of the unity government, has resisted doing so, saying his spoken assurances should be good enough.

In his letter on Wednesday, he said he would back the decisions made at the European Union summit meeting on Oct. 26, when the deal was negotiated, and would support “the economic policies linked to those decisions.”

Still, he repeated his party’s conviction that “certain policies have to be modified,” saying it was the only way to draw Greece out of a deepening recession. He did not elaborate.

The leaders of the so-called troika of foreign lenders supporting Greece — the European Commission, the European Central Bank and the International Monetary Fund — have demanded stiff cuts in Greek public spending, payrolls and pensions as a condition for advancing the money that Greece needs to avoid defaulting on its debts, run up during years of budget deficits. The austerity measures are deeply unpopular and have led to mass demonstrations that have sometimes turned violent. The austerity plan ultimately fractured the Socialist government of former Prime Minister George A. Papandreou, leading to the formation of the unity government. Mr. Papandreou has supplied a written commitment of support, but the leader of the third party in the coalition, Giorgos Karatzaferis of the right-wing LAOS party, has yet to do so.

The Bank of Greece said in a report on Wednesday that the new debt plan was Greece’s “last such opportunity” and that “what is at stake is whether the country is to remain within the euro area.”

Second Coalition Leader in Greece Backs Debt-Relief Deal - NYTimes.com