Samaras Says He’d Join Alliance to Keep Greece in Euro

by James HertlingNikos Chrysoloras

5:00 AM EEST

April 2, 2015

 Bloomberg

As Greek Prime Minister Alexis Tsipras struggles to secure a financial bailout to stay in the euro, his chief rival said he’s open to offering a political rescue.

Opposition leader Antonis Samaras, who was ousted by Tsipras in January elections, signaled his willingness to join a unity government if the concessions required to win emergency loans drive a wedge through the ruling anti-austerity coalition.

“If the plan is to keep Greece in the euro area, we will provide support,” Samaras, 63, said in an interview in Athens on Wednesday. “Exit would signal a total catastrophe.”

While Samaras questioned Tsipras’s commitment to the single currency, he said it’s the only conceivable economic path for Greece.

“For the euro area, the spillover effect from Greece leaving the euro is not going to be today as big as it would have been four years ago,” Samaras said from his New Democracy party headquarters. “But it’s still going to be huge, and it’s going to be a political disaster,” he said in his office, where bullet holes in the walls and windows remained after a 2013 attack by opponents of his austerity policies.

Tsipras dismissed the prospect of joining the opposition leader. “Scenarios of a pro-bailout unity government that Mr. Samaras and various forces in Greece and abroad are plotting, are a midsummer night’s dream,” according to a statement issued by the premier’s spokesman, Gabriel Sakellaridis.

Market ‘Asphyxiation’

With cash running out and a renewed recession looming, Greece is in talks with euro-area officials on conditions for aid. The standoff has cost banks more than 15 percent of their deposit base, which has declined for six months.

The European Central Bank raised the ceiling of emergency cash keeping Greek lenders afloat to almost 72 billion euros ($78 billion). The country’s three-year debt fell, sending yields up 51 basis points to 23.7 percent at 1:45 p.m in Athens.

Tsipras says he wants to strike an “honorable compromise” that would pave the way for the disbursement of emergency loans and avert a default that could push Greece out of the currency bloc.

“I see a lot of words, a lot of theory, a lot of lies, and no action,” Samaras said. “All of these add up to a big question mark.” The government should honor the commitments made in February’s deal to extend the bailout, he said.

Financial Aid

“If they ideologically decide they won’t abide by this agreement, then you may have a default,” Samaras said.

Tsipras, 40, campaigned on reversing the pledges his predecessors, including Samaras, made to secure aid pledges of 240 billion euros. Promising to end spending cuts, pension freezes, and state asset sales has left him in a bind now that he needs to persuade the rest of Europe to keep cash flowing.

“Euro-area countries which have lower GDP per capita than Greece, countries which have elections and countries which have themselves gone through a program won’t give us any more money if they see that the government is not abiding by its commitments and it’s behaving in an anti-European manner,” Samaras said.

The Harvard-educated economist dismissed criticism he’s not supporting the government in its bid to avert an economic and social implosion. “We have already voted in favor of the two bills the government brought to parliament,” he said. “In terms of policy accommodation, we already provide it.”

According to Samaras, Tsipras is further undermining the country’s credibility by making overtures to Russia.

Tsipras, who will meet President Vladimir Putin in Moscow next week, has “sent his cousin to Iran to ask the Tehran government to buy Greek bonds” and sought assistance from Russia and China, Samaras said.

“When you are in Europe and ask Chinese, Iranians, Russians to finance your deficit, don’t you send a signal to the rest of Europe that you are not really a serious pro-European?”