100 day Greek challenge

October 5, 2009 12:00 am

, ATHENS, Oct 5 – Greece’s new socialist Prime Minister George Papandreou on Monday began forming the team that will launch a 100-day spending programme to rescue the economy after his election triumph.

Papandreou’s socialist Pasok party swept the ruling conservative New Democracy party out of office in a snap election Sunday. With nearly all votes counted, Pasok had 44 percent of the vote against New Democracy’s 33.5 percent.

The American-born Papandreou, 57, whose father and grandfather were also prime ministers of Greece, is to be invited by President Karolos Papoulias to form a government on Monday and name his ministers on Tuesday.

The new leader has vowed to immediately launch into a 100-day plan to boost the crisis stricken economy by creating jobs and cleaning up public finances. He has promised new laws to redistribute income to the poor, boost public investment and clamp down on corruption.

Part of the stimulus will be to order salary and pension hikes above the rate of inflation in 2010.

In his victory speech, Papandreou promised to tap the country’s creative powers.

"I know this country’s great potential well, the powers that suffocate under corruption, nepotism, lawlessness and waste," he said.

"We can free these powers and we will."

"I pledge to make every effort to persuade Greeks that we can achieve this."

The Athens stock exchange greeted the election result with a 1.59-percent jump on Monday.

"All economic observers are eagerly awaiting the new government’s formation for an idea on Papandreou’s determination to carry out reforms," Manos Hatzidakis, a financial analyst at Greek brokers Pegasus told AFP.

"The strong majority will enable him to take difficult decisions," he said.

After many years of steady growth, Greece’s economy has come to a near standstill.

Its public debt, one of the highest in the European Union, is set to exceed 100 percent of gross domestic product this year. The EU has warned Greece over its excessive budget deficit and Papandreou will have to negotiate a new financial pact with the European Commission.

The socialists are expected to have 160 deputies in the 300-seat parliament.

Greek newspapers highlighted similarities to the stunning victory Papandreou’s father Andreas won in 1981 to bring the fledgling Pasok party to power for the first time.

The socialists won over three million votes, an extra 270,000 from the 2007 election, while the ruling party lost over 700,000 supporters.

"For the first time since 1981 the gap with New Democracy neared double digits," said Ethnos daily. "The country’s electoral map was radically changed with a number of New Democracy’s electoral strongholds falling to the socialists."

A number of senior conservatives failed to secure re-election including former finance minister George Alogoskoufis, his deputy Antonis Bezas and outgoing labour minister Fani Palli-Petralia.

Outgoing Prime Minister Costas Karamanlis immediately announced his resignation as leader of New Democracy which had been hit by a series of scandals and had ruled with a one seat majority for the past year.

Karamanlis, 53, took power in 2004 with promises to clean up graft and promote transparency but top ministers were implicated in some of the scandals.

"The outgoing prime minister’s failings should serve as a lesson to George Papandreou and his cadres," Eleftherotypia daily warned.

"Papandreou takes over the premiership at a particularly critical time for the country. Reliability, transparency and the restoration of citizens’ trust towards the state are needed above all."


Latest Articles

Most Viewed