x Abu Dhabi, UAEFriday 19 January 2018

Greek prime minister is sworn in

New three-party coalition government will stick with austerity - at least for the time being.

ATHENS // Greek conservative party head Antonis Samaras was sworn in as prime minister yesterday, at the helm of a three-party coalition that will uphold the country's international bailout commitments.

It ends a protracted political crisis that cast grave doubt over the country's future in Europe's joint currency and threatened to plunge the continent deeper into a financial crisis with global repercussions.

But the new government still has massive challenges ahead. It must deliver on pledges by its predecessors to generate huge savings, privatise publicly-owned companies and real estate, cut about 150,000 civil service jobs and open restricted professions to competition.

Mr Samaras, a 61-year-old, US-educated economist, was sworn in three days after his New Democracy party won the second national elections in six weeks but without enough votes to form a government on its own. He is Greece's fourth prime minister in eight months.

The conservatives will join forces with the socialist Pasok party, which came in third, and the smaller Democratic Left, led by Fotis Kouvelis. Discussions on the lineup of ministers were expected to be completed late last night.

"I will ask the new government that will be formed tomorrow to work hard so that we can offer tangible hope to our people," Mr Samaras said as he left the presidential mansion.

Greek stocks rose marginally in response to the news, with Athens shares closing up 0.5 per cent.

The analyst Theodore Krintas said he expected markets to welcome the breakthrough. "The formation of a government ... will take part of the uncertainty away and at the same time, hopefully, will take Greece out of the [headlines] of the mass media all over the world," said Mr Krintas, who is managing director of Attica Wealth Management.

The new prime minister was to meet the outgoing finance minister Giorgos Zanias, the Pasok head Evangelos Venizelos and Mr Kouvelis yesterday evening.

All three parties broadly back Greece's pledges to bailout creditors for further austerity and reforms, although they have pledged to renegotiate some terms of the rescue loans. Mr Samaras campaigned on promises to lower taxes, restart the economy and provide income boosts to low earners, large families, police and fighter pilots.

New Democracy and Pasok are also looking for an extension of at least two years in the deadlines for implementing fresh cutbacks worth €14.5 billion (Dh67bn).

Mr Kouvelis went further yesterday, saying that Greece should eventually "disengage" from austerity commitments and "lift those measures that have literally bled society."

Greece has been dependent on the loans from other Eurozone countries and the International Monetary Fund since May 2010. In return, it has imposed deep spending cuts, slashed salaries and pensions and repeatedly hiked taxes.

The measures have left the country struggling through a fifth year of recession, with unemployment spiralling to above 22 per cent and tens of thousands of businesses closing.

Earlier yesterday, hundreds of poverty-stricken Greeks queued in a central Athens park for free vegetables. Cretan farmers handed out some 2,700 10-kilo packages.