Euro Area Debt Crisis
November 3, 2011
Today has been a whirlwind of rumours coming out of Greece. One thing seems clear: a referendum is off the table now. What remains unclear is what will happen to the government. Ultimately, it doesn’t really matter what the composition of the Greek government is.
While prime minister Papandreou favoured forming a coalition of national unity earlier today, the main opposition leader Antonis Samaras has said this is not an option. Instead, Mr Samaras is demanding the prime minister resign and an interim government be installed until elections can be held in 4-6 weeks. There are rumours Mr Papandreou has agreed to step down if New Democracy supports him in the vote of confidence in parliament tomorrow, but these rumours are unconfirmed. There are also rumours that Lucas Papademos, a former ECB vice president, has been tapped to lead an interim government. Mr Papademos was asked to fill the role of finance minister last June when prime minister Papandreou reshuffled his cabinet and resolutely turned the role down, presumably because he considered taking the role akin to political suicide. I remain unconvinced that he will agree to lead an interim government that is tasked with implementing the terms of a bailout programme that is doomed to fail.
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