Published November 01, 2012
ATHENS, Greece – Greece's troubled coalition government suffered another blow Thursday, when two members of the Socialist party quit, the latest sign of growing dissent among the ruling parties ahead of a key vote next week on austerity measures.
Lawmaker Michalis Kassis and Mariliza Xenogiannakopoulou, a former health minister, quit their Socialist party ahead of a vote next week on €13.5 billion ($17.5 billion) in additional spending cuts and tax increases over two years.
The country's international creditors have insisted on the package in return for the continued payment of vital bailout loans that Greece needs to avoid going bankrupt.
"The government has chosen to pursue the same dead-end policies that have had such dramatic financial and social consequences," Xenogiannakopoulou, who is not a member of parliament, wrote in a letter to the Socialist party leadership.
"A progressive, historic, and radical party has turned itself into a small department of the political center-right, having adopted its neo-liberal values and choices," she wrote.
Greece's conservative-led coalition was formed after June elections when center-right Prime Minister Antonis Samaras formed a three-party alliance with the Socialist PASOK party and the Democratic Left party.
But his government has shown growing signs of fracture recently — with all three parties losing ground in opinion polls — amid increasing economic hardship. A quarter of Greek workers is without a job.
The Democratic Left has promised to vote against the austerity measures if they include planned provisions to ax labor rights.
Kassis announced his resignation in two television interviews, and when his action is made official in parliament will reduce the coalition's representation in the 300-member assembly by one seat to 175.
"I am not particularly concerned. I think the measures will pass," Finance Minister Yannis Stournaras said.
Martin Koehring, a eurozone analyst at the Economist Intelligence Unit, said the government still has a comfortable majority to vote through the austerity package, even if Democratic Left votes against it. But a growing rebellion by lawmakers in the Socialist PASOK party would be worrisome.
"The other junior left-wing partner, PASOK, could derail the reform package if several of its (deputies) vote against the deal," he said.
Greece needs the next installment of its bailout cash to pay a bond redemption on Nov. 16. Failure to pay the bond redemption would result in a debt default that would roil financial markets and could see Greece drop out of the 17-country eurozone.
Meanwhile, more than a thousand protesting officers from the police, coast guard and fire department joined a rally in Athens on Thursday to demonstrate against government cuts. It was the latest protest ahead of a planned two-day general strike next week.