Greek crisis

Six weeks into his term, Greece's transitional Prime Minister Lucas Papademos is already running out of time.

In March 2012, his struggling country is slated to pay back 14 billion euros ($18 billion) in state bonds.

By that time, Greece must negotiate a voluntary partial debt cancelation and a second bailout package. That's assuming Athens can also whip out all the reforms it has promised its bankrollers - a tough task in itself.

Working against the clock

The country's new premier simply needs more time, according to economist and journalist Panagiotis Bousbourelis, who gives Greece's transitional coalition government a mixed score.

"Critical negotiations and conversations are taking place simultaneously. You can't just bow out now and hold new elections," he said, adding that thorough preparations were needed before important decisions about refinancing the country could be made in the coming months.

The socialist PASOK party, who form part of the coalition government, also want to give Papademos more time. PASOK hope a delay will give them a chance to whip their deeply divided party into shape and to determine a successor to their former leader, Prime Minister George Papandreou, who stepped down in November amidst the crisis.

PASOK's Finance Minister Evangelos Venizelos on Wednesday announced that new elections would be postponed from February 19 to after the Greek Easter on April 15, but Bousbourelis believes it is critical that Papademos remain in office until at least April 2012 - and that further postponing elections or restructuring the government at a later date could also be an option.

Talks look good

Bousbourelis sees progress on its way, if only Papademos can hold on to his office. "The negotiations over a voluntary exchange of old Greek state bonds for new ones with longer maturation terms are well on the way," he said.

Bousbourelis said that adding a low four-percent interest rate for the new bonds is a realistic goal, and could deliver Papademos an important victory if he can eke it out.

The passing of the 2012 budget, he said, was already a success for the transitional leader. On the other hand, other reform plans, such as privatization of state funds or the layoffs of civil servants, have stagnated.

More debate

But the government cannot seem to agree on anything. Even when it comes to election dates, nothing is certain. Leading conservatives, in contrast to Venizelos, see no reason to put off the elections, while right-wing populists say elections should either take place immediately or be put off until the end of 2012.

And election dates are not the only source of conflict in Greece's cabinet; strife has become so common that Transport Minister Makis Voridis demanded reform proposals be debated within his Popular Orthodox Rally before they come to the cabinet table. Papademos kept his cool, responding that the parties were represented in the government as it was.

'Sabotage afoot'

The coalition appears to be doomed to squabble. Yet the real enemy to fiscal reforms is outside politics, according to Stelios Katranides, economics professor at the Aristotle University of Thessaloniki.

"There are strong special interest lobbies in this country that want to leave things the way they are, basically because they want the drachma back," Katranides said in an interview with Skai television.

Katranides said that some dubious figures wanted the drachma back because they perceived it as a way out of paying their debts to the state - or a way of snapping up bargain prices should the country leave the euro.

But Papademos has declared that keeping Greece in the eurozone is the main goal of his time in office. If he is to achieve this goal, he will have to come out tougher against reform opponents – even those in his own ranks.

Author: Jannis Papadimitriou / dl
Editor: Ben Knight