Greece Takes Gamble on Presidential Vote

   < < Go Back
from The Wall Street Journal,

Parliament Will Vote Next Week on New Leader in Risky Government Bid to Stabilize Stance With Creditors.

Greece’s government said it would bring forward to next week a high-stakes parliamentary vote for president, seeking to end the country’s political uncertainty and steer the fate of its fraught European-led bailout program.

The government spokeswoman said on Monday that the Parliament would vote on a new president on Dec. 17—two months ahead of schedule—to replace head of state Karolos Papoulias, whose five-year term was slated to end in March.

The announcement came just hours after eurozone finance ministers decided to extend Greece’s deadlocked bailout talks into early next year.

“The immediate time period ahead is crucial, both for the completion of the new lending agreement, and for taking care of all issues, including the debt,” government spokeswoman Sofia Voultepsi said, adding that Greece needed to proceed with those talks “under conditions of national unity and political stability.”

After years under threat of default and chaos, Greece again faces interlinked political and economic crises. Fearing a fresh bout of political uncertainty in the months ahead, representatives of the European Central Bank, the European Commission and the International Monetary Fund—the so-called troika that sets terms for the bailout—have been dragging their feet on the latest negotiations.

Those delays are eroding the government’s hopes of winning parliamentary support for its presidential candidate. By rushing the vote, the government hopes to regain momentum.

“It is a move that carries a big political risk,” said John Dimakis of STR, a political communications consultancy in Athens. “But it is a message with two recipients: the one is inside the country, as it shows the government isn’t willing to drag out the country’s political uncertainty. The other recipient is the troika; it sends a message to the creditors that the government is willing to do whatever it takes.”

Greece has been under strict international supervision since first seeking a bailout from its eurozone partners and the IMF in 2010. But with public finances steadily improving and the economy returning to growth, the government was hoping to exit that supervision at the end of this year, when the eurozone portion of the country’s $296 billion bailout runs out.

Those hopes have been hamstrung, however, by months of fruitless negotiations with the troika. Differences over how much extra money Greece must set aside to meet its budget targets next year—and over policy shifts the country needs to make—have stalled the talks, now overshadowed by a growing fear that the vote for a new president could plunge Greece into fresh political uncertainty.

Under Greece’s constitution, the head of state—a largely ceremonial position—must be elected by a supermajority in the 300-seat Parliament. The body gets three tries—the first two setting the hurdle at 200 lawmakers, the third at 180. The second and third rounds have been tentatively scheduled for Dec. 22 and Dec. 29.

“No one is going to show their cards in the first two rounds,” said a senior government official. “It will come down to the last vote.”

More From The Wall Street Journal (subscription required):