Greece’s Meimarakis Likely to Fail in Bid to Form Government

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Are Snap Elections Good for Greece?

Greece’s main opposition figure, Evangelos Meimarakis, has until Monday to cobble together a big enough majority coalition to take a stab at governing, even as analysts predict his efforts are doomed.

President Prokopis Pavlopoulos invited Meimarakis Friday to try to form a new administration within three days, part of the constitutional procedure set in motion by Greek Prime Minister Alexis Tsipras’s resignation. Meimarakis, the head of the New Democracy party, is unlikely to succeed. His lawmakers, combined with those of other pro-European opposition parties, total 106 in the 300-seat parliament.

After eight months in power, Tsipras stepped down late Thursday, setting in motion a process that will take Greeks back to the ballot box in September. Tsipras’s goal is to renew his mandate after his capitulation to the euro area’s conditions for a bailout caused his own Syriza party to split.

In the meantime, his rival has this weekend to thwart him.

Meimarakis “wants to show that he too can be a government-in-waiting and he wants to demonstrate what he would do if he gets the mandate again after elections,” said George Pagoulatos, a professor at the Athens University of Economics and Business. “He’ll also want to show that he isn’t playing Tsipras’s game, and enjoy the limelight that this three-day mandate offers him.”

Another Vote

A September election “would occur before the first program review in October and may well hamper and delay the technical work and political decisions necessary for its completion,” Fitch Ratings said Friday.

Tsipras’s call for snap elections was expected and is welcome as it will achieve a “clearer structure” in the Greek government, Thomas Wieser, the Austrian who leads the European officials who prepare meetings of euro-area finance ministers, told radio Oe1 also on Friday.

While the move may slow Greek economic overhauls in the short term, “what’s more important is how a new government, which many people expect to be led by Alexis Tsipras again, will execute the reform program,” Wieser said.

The agreements reached with Greece stand regardless of who is governing, Dutch Prime Minister Mark Rutte also said Friday.

“We must see if we can find a real, serious political solution from the present parliament so that we can avoid at this time the negative outcome that an election process may cause,” Meimarakis said Friday.

Making Overtures

These efforts, he said, include the intention to discuss with Tsipras the possible formation of a government with Syriza with current Deputy Prime Minister Yannis Dragasakis as premier.

Dragasakis replied in a Facebook post that he could never accept such a proposition.

While Meimarakis contacted Tsipras Sunday to request a meeting, the Prime Minister explained to him that, as there’s no margin for a convergence of the programs of the Syriza and New Democracy parties, there’s no point in the two party leaders meeting, a Greek government official said.

“It’s clear that the current parliament, given Mr Tsipras’s negative attitude, can’t provide a new government,” Fofi Gennimata, leader of the socialist Pasok party, said Saturday following a meeting with Meimarakis. Her party has 13 lawmakers in Greece’s 300-seat legislature.

Elected in January on an anti-austerity platform, Tsipras suffered a revolt from within his own party after pushing through the kind of tax increases and spending curbs that he had vociferously opposed while in opposition.

A group of at least 25 Syriza lawmakers led by former Energy Minister Panagiotis Lafazanis abandoned the party to create a new movement called “Popular Unity” that is now the third-largest party in the Greek parliament.

“We won’t accept being in the euro area and having bailout programs imposed on us,” Lafazanis told reporters in Athens on Friday at the movement’s inaugural press conference. If resisting the bailout means Greece exiting the euro area “this is in no way a catastrophe. It’s a path that can create hope and prospects for our country.”

What Next?

If Meimarakis fails to forge a coalition within the three-day mandate, the onus falls to the Popular Unity rebel group to give it a go. If Lafazanis doesn’t succeed either, as is probable, the path is open to national elections that may take place on Sept. 20 at the earliest.

Greek stocks and bonds fell on Friday, with the yield on two-year notes rising 19 basis points to 12.98 percent at 6:59 p.m. local time. The Athens Stock Exchange General Index dropped 2.5 percent. Greek stocks have fallen 20 percent since the stock exchange reopened on Aug. 3 following a five-week halt prompted by the imposition of capital controls.

Under Tsipras, Europe’s most-indebted country was beset by turmoil and brought the economy to the brink of ruin. Tsipras used a televised address on Thursday to list his achievements, from clinching a new aid package to securing a firmer commitment from euro-area partners to consider debt relief.

Still Popular

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Tsipras remains popular with Greek voters, who gave Syriza 33.6 percent support, a 15.8 percentage-point lead over the main opposition New Democracy party, in a July 25 poll by Metron Analysis. Polls haven’t yet offered an indication of how much support Popular Unity would siphon off.

“Tsipras is likely to get what he wants: a return of a new Syriza government minus the old Syriza hardliners,” said Jan Randolph, director of sovereign risk at IHS Global Insight in London. “Despite the trials, tribulations and political somersaults with the eurozone authorities and the International Monetary Fund over the last few months, the Greek people still trust him the most to serve them as best he can.”

(An earlier version of this story was corrected to amend the basis-point change in the ‘What Next?’ section.’)

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