Greek Prime Minister to resign, election in May

By John Hadoulis

ATHENS—Greek Prime Minister Lucas Papademos was to formally step down Wednesday to pave the way for early elections after wrapping up a landmark debt swap and eurozone bailout to save the crisis-hit economy.

Papademos will tender his resignation to President Carolos Papoulias who will then dissolve parliament and call for elections within 30 days, a government source said.

The 64-year-old economist, who was appointed prime minister exactly five months ago in a power-sharing deal, is also to make a nationally televised address in the evening, the source added.

Papademos is expected to stay on to supervise the electoral process, along with most of his key ministers.

May 6 is widely seen as the most likely date for the election but the outcome of the vote is uncertain, with anger running deep among Greeks over tough austerity measures that were needed to secure the rescue package.

Papademos, who was vice-president of the European Central Bank until 2010, was chairing a final cabinet meeting at 1200 GMT before seeing Papoulias at 1400 GMT, his office said.

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“The prime minister will submit his mandate and a presidential decree will be issued to dissolve parliament,” the government source said.

Papademos took over in November as head of a coalition backed by the conservative New Democracy party and the socialist Pasok party to complete a debt-saving bond swap with private creditors and ratify a eurozone bailout worth 130 billion euros (US$171 billion).

The bailout was ratified by Greek parliament last month and Athens has already arranged to exchange around a third of its near and midterm debt which now exceeds 350 billion euros.

Parliament on Tuesday approved a labour bill restructuring social security funds, the final piece of legislation that Papademos’s government had pledged to pass before the ballot at the behest of Greece’s creditors, the EU and IMF.

“All the conditions are present for elections on May 6,” New Democracy head Antonis Samaras, whose party currently enjoys a narrow lead in opinion polls, told the private Mega television station on Monday.

Mega released a poll giving New Democracy a four-point lead over Pasok, which is narrowing the gap under its new leader, former finance minister Evangelos Venizelos.

The survey by pollsters GPO suggests that with a mere 18.2% of the vote, New Democracy may be unable to form a majority government.

Amid mounting anger over two years of painful austerity, nearly one in five respondents did not give a party preference and more than three percent said they would support a neo-Nazi party, giving it enough votes to enter parliament.

But Samaras insisted on Monday he would not form a government with Pasok if his party failed to garner enough votes, even if this meant new elections.

Greece in June will attempt to chop another 11.5 billion euros (US$15 billion) off spending by 2014 to meet conditions laid down under a previous EU-IMF debt rescue.

Most of the 1,200 people questioned in Monday’s poll said they wanted a coalition government and 56% took a dim view of Papademos’s legacy.

Elections were originally scheduled for 2013.

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