Greek Government Stability Shaken as Party Withdraws

Greek Prime Minister Antonis Samaras lost one of his two coalition partners over his closure of state broadcaster ERT, sparking concern about the government’s stability that sent bonds and shares sliding.

The Democratic Left party instructed its ministers to quit Samaras’s government, the party said in an e-mailed statement after a meeting of its lawmakers in Athens today. Fotis Kouvelis, Democratic Left’s leader, condemned Samaras yesterday for defying a court ruling to reopen ERT, which Samaras unilaterally shut on June 11.

“We made a majority decision that Democratic Left is withdrawing from the government,” Democratic Left lawmaker Vasileios Oikonomou told reporters in comments broadcast live on Skai TV. “We are withdrawing our ministers and general secretaries. That’s now a party decision.”

The loss of Democratic Left as a coalition partner is a setback to Samaras’s attempt to build a broad consensus behind austerity measures demanded as a condition for the country’s 240 billion euros ($317 billion) of bailout loans. Without the 14 lawmakers from Democratic Left, the alliance between Samaras’s New Democracy and Socialist Pasok has a majority of just 153 seats in the 300-seat legislature.

Kouvelis had insisted on ERT reopening with all 2,600 employees while Pasok leader Evangelos Venizelos accepted a proposal by Samaras for fewer workers.

“Today we mark one year of government and three years remain -- which we should complete for the sake of the Greek people,” Samaras said in an address to the nation on Mega TV after meeting with his coalition partners. “Kouvelis wants us to return to a shameful status quo with excess workers where nothing is changed and where there’s no hope that one day something will change at ERT.”

Bonds Drop

Greek 10-year government bonds fell for a third day, pushing the yield up 67 basis points to 11.33 percent at 3:33 p.m. in Athens, the highest level since April 29. The benchmark Athens general index declined a third day, losing 3.28 percent.

Democratic Left’s departure means Samaras must replace that party’s ministers in the Cabinet, precipitating a reshuffle that may include more lawmakers from Pasok. Samaras doesn’t need a confidence vote from Parliament. He may request one or the main opposition party, Syriza, can demand one.

Even without Kouvelis, Samaras might be able to count on support from some independent lawmakers.

“It’s not a political crisis, it’s turbulence,” Finance Minister Yannis Stournaras told reporters in Luxembourg last night after a meeting of euro-area finance ministers. “It’ll pass.”

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