Back in February, after the terms of the loan agreement were set by European finance ministers, Papademos stated that “the only alternative to today’s agreement is a catastrophic default.” European leaders have repeatedly stated that Greece receiving the $220 billion bailout — and new loans and a huge write-down of its debt — is contingent on its government imposing harsh austerity measures in the form of higher taxes and salary and wage cuts.
Papoulias is meeting with the leaders of several smaller parties to persuade them to join in a two-year coalition with New Democracy and Pasok that would still stick to the loan agreement, but with a possible renegotiation of some of the conditions. Papoulias will focus on talks with the smaller Democratic Left party, says Bloomberg.
Last Friday, Wolfgang Schaeuble, the German finance minister, said that Greece would not receive any more bailout money without carrying out the cuts, which amount to about 5 percent of its gross domestic product. Greece has only about 2 billion euros in cash left, enough for it to function into July or August. As Bloomberg quotes Riccardo Barbieri, chief European economist at Mizuho International Plc: “‘If new elections are called, they will indeed amount to a referendum on staying in the euro.’”
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Photo of Syriza supporters taken May 7, 2012, by Popicinio_01
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