Prime Minister Lucas Papademos is to have a series of meetings with the leaders of the three parties in his fragile coalition.
His first meeting was to be held with the New Democracy leader, Antonis Samaras this morning after conservative party and the second-largest party in the government, vehemently opposed projected reforms foreseeing reductions to auxiliary pensions.
Papademos was reportedly vexed after a cabinet meeting midweek, which focused on the proposed merging of auxiliary pension funds and cutting pension payments, and resulted in a clash between ND and PASOK ministers.
PASOK’s Labor and Social Insurance Minister Giorgos Koutroumanis emerged from the meeting to declare that the reforms were just a basis for a debate that will lead to the drafting of legislation to be submitted in Parliament next month.
His comments came after strong opposition to the prospect of further cuts to pensions by ministers of ND, which is leading opinion polls.
In his meetings with party leaders, Papademos is expected to emphasize the importance of their support and collective attitude as his government must approve, within the next six weeks at most, a set of measures that will cover this year’s budget shortfall.
After Papademos’s first meeting with ND leader Antonis Samaras, the PM will be followed by separate meetings with socialist PASOK leader and former PM George Papandreou and with the head of the far-right Popular Orthodox Rally (LAOS), Giorgos Karatzaferis. It remained unclear whether the other meetings would be held before or after the Christmas weekend.
If the talks fail, the prospect of snap elections will loom even larger, which will not please the country’s creditors, whose representatives -known as the troika- are to return to Athens for negotiations on a second bailout for Greece in mid-January.
At the cabinet meeting, Papademos stressed that auxiliary pension funds could not remain untouched as they are not viable and offer significant scope for savings. Further, the government has agreed with its creditors to cut the funds as part of an overall drive to raise revenue and plug a gaping budget deficit.
A possible compromise, which could placate ND without completely alienating the troika, is the merging of the auxiliary pension funds in a first phase followed by pension cuts later.