In Brussels, No Unity On Greece

13.02.2012 08:24

WSJ: One of the central demands of the European Commission, euro-zone governments and Greece’s other official lenders has been that a broad range of Greek political leaders explicitly sign off on the policy commitments that Athens makes to win bailout loans. That’s not just true now that Greece is led by Lucas Papademos, supported by the main political parties.

Even when George Papandreou’s center-left Pasok party held power, Brussels demanded buy-in to austerity policies from center-right leader Antonis Samaras, who was clearly in opposition. Yet while Brussels demands political consensus in Athens, there’s little sign of it in Brussels.

On Thursday, the center-left Socialists & Democrats grouping in the European Parliament sent out a statement saying it had written to European Commission President José  Manuel Barroso about the talks in Greece.

The S&D, which is under new leadership now that its former head Martin Schulz has become European parliament president, has long expressed its disagreement over what it feels is excessive focus on austerity within the region.

Yet Thursday’s statement went well beyond that and attacked the now-commonplace notion among senior European officials that Greece’s failure to implement its policy pledges were playing a significant part of the current crisis.

“I am writing to express the grave concern of the S&D Group over the terms of conditionality imposed by EU negotiators on Greece as the price of approval of the latest tranche of loan funds,” said S&D group leader Hannes Swoboda.

“Representatives of the Commission seem to have conducted themselves on the basis of the unfounded assertion that Greece has not made sufficient efforts to restore fiscal stability and have imposed conditions which have less to do with economics than with ideology. It is the ruinous policies of extreme austerity imposed on Greece, which have driven it into ever deeper recession.”

A couple of points on that. The center-left is now in power in very few Euro zone countries, giving it an extra degree of rhetorical freedom. Belgium’s new prime minister Elio di Rupo is one of the few of the S&D tribe to enter power recently but even he heads a broad six-party coalition.

It’s also worth remembering that the man charged with negotiating the bailout deal is Evangelos Venizelos, Greece’s finance minister and a key member of Greece’s S&D-affiliated Pasok party. Still, the S&D missive underlines one of the central dilemmas of the euro zone crisis: Few things irk investors and lenders more than political disunity. Yet few things are harder to avoid.

An S&D spokeswoman was not available to comment.