ATHENS – Socialist Pasok leader George Papandreou started putting together a cabinet yesterday after winning a decisive mandate to battle corruption and lead Greece out of a worsening economic downturn.
Appointments to key economy, finance and foreign ministry posts are expected as early as today, and Greek media were reporting Mr Papandreou might take one of the jobs for himself to emphasise how seriously he takes the crisis.
With 99 per cent of Sunday’s vote counted, results showed Pasok won a resounding victory over the conservative New Democracy party, which suffered the worst showing in its history.
Pasok won a comfortable majority of 160 seats in the 300-member parliament.
It was a personal victory for US-born Mr Papandreou (57). He was handpicked – partly on the strength of his name – in 2004 to lead the party his father, Andreas Papandreou, founded, only to lose twice to another scion of a political family, New Democracy’s Costas Karamanlis.
“What is impressive in this parliamentary election is that George Papandreou crushed his opponent with the largest percentage difference in the last 35 years,” said Anthony Livanios, political analyst at polling agency Alpha Metrics.
Mr Karamanlis gave up his role as New Democracy party chief when he conceded the election on Sunday night.
Difficult challenges lie ahead for the new government. Greece’s budget deficit tops 6 per cent of gross domestic product – well above the EU limit of 3 per cent – unemployment is rising and the public is clamouring for solutions to urgent crises in endemic corruption, education, social security and immigration.
“We must consolidate all our strength; we have a heavy responsibility,” Mr Papandreou said yesterday before receiving a formal mandate from the president to form a government.
Mr Papandreou is set to be sworn in as prime minister today and afterwards to obtain a presidential decree to allow him to rearrange ministries, including splitting economy and finance, a Pasok official said yesterday.
A first test will come with the budget, a draft of which needs to go to parliament by November so that it can be approved before the year-end break in mid-December.
“The budget will be a good test to see where the government is going, whether they are serious about improving the competitiveness of the economy,” said Diego Iscaro, an analyst at IHS Global Insight.
The budget will feed into a three-year plan Mr Papandreou wants to submit to Brussels to convince EU partners he is determined to tidy up Greece’s fiscal mess.
In a nod to that effort, European Commission president José Manuel Barroso wrote to Mr Papandreou yesterday.
“Europe today faces challenging times: we need to deploy our strengths and work together if Europe is to emerge stronger from the current financial and economic crisis and build a prosperous, secure and sustainable future for all Europeans,” Mr Barroso said in a congratulatory message.
Pasok has promised a €3 billion stimulus package on a platform of taxing the rich and helping the poor. But it will need to convince the markets, the EU and voters that it can do so without further worsening Greece’s ballooning deficits. – (Reuters)