Lucas Papademos warns of 'catastrophe' if Greek voters reject austerity

 

By Damien McElroy, in Athens 4:47PM BST 18 May 2012

Greece's former technocratic prime minister used a resignation letter on Friday to warn voters that rejection of the eurozone bail-out in next months election would be a "catastrophe".

Newly appointed caretaker Prime Minister Panagiotis Pikrammenos, right, poses with former PM Lucas Papademos prior their meeting and after his swearing-in ceremony at the Presidential Palace, in Athens on Wednesday. Photo: AP

Lucas Papademos, who stepped down on Wednesday made his comments as signs emerged of a backlash against anti-bailout parties as fears grow Athens could be ejected from the single currency.

An opinion poll showed a clear lead for the pro-bailout New Democracy party for the first time since the shock emergence of the hard-Leftist Syriza as a political force in the May 6 elections.

The poll predicted New Democracy would win 26.1 per cent of the vote compared to 23.7pc for Syriza.

Mr Papademos said a stand-off over the budget cuts and privatisation required by the 130 billion euros bailout would unavoidably cost Greece's place in the euro.

"We are, once again, at a critical crossroads," Mr Papademos wrote. "At a time when many countries, including in our neighbourhood, are working hard to win a place in the EU it would be tragic if we went in the opposite direction."

Alexis Tsipras, the Syriza leader, sought to play down fears over his party's radicalism yesterday by accusing its opponents of unfairly painting its agenda as euro exit.

“This scaremongering is being generated by political forces playing with fire and by speculators playing speculative games,” Mr Tsipras said after meeting with European Parliament President Martin Schulz. “I expressed my conviction that Greece is, and must remain, an equal member of the euro area with obligations but also the rights that accrue to it from its membership.

Mr Schultz used to a joint appearance with Mr Tsipras to highlight the dangers of the path. He said: "Many people believe that it would be the end of a negative cycle but for me it would be the beginning of an even more negative cycle."

Panagiotis Pikrammenos, 67, the new caretaker prime minister, told his unpaid government that it must avoid the public infighting that has frightened the markets.

"We must not forget that all of Europe is watching us. We must all work to steer the country to a safe harbour, " he said. "I would like this government to set an example of a different type of behaviour, which the Greek people, who have been severely tested, will be able to respect."

Fears that the election will further destabilise Greece's position led Kathimerini, the leading broadsheet, to remind politicians of the high stakes in the election. An editorial said: "Nothing can be taken for granted in this latest election race. Voters appear to want a team to govern the country, a program, a collective effort and, especially, a definitive stance.

Angela Merkel, the German Chancellor, spoke with Greek President Karolos Papoulias by telephone to stress that June 17 poll must provide a strong mandate.

"We're awaiting the results of these elections and it's the wish of all European partners and the (German) government that a government capable of taking decisions in Greece should be formed as quickly as possible after the elections," said Georg Steiner, Germany's deputy government spokesman.

Lucas Papademos warns of 'catastrophe' if Greek voters reject austerity - Telegraph