* Greek PM Papademos calls snap election May 6
* Vote may not produce clear winner, bailout plan at risk
* Greece must push reforms, austerity to get aid
(Updates with details, comments)
By George Georgiopoulos and Dina Kyriakidou
ATHENS, April 11 (Reuters) – Greece called a snap election
for next month on Wednesday, launching a campaign that may
produce no clear winner and threaten implementation of the
international bailout plan that saved the nation from
bankruptcy.
Prime Minister Lucas Papademos announced the May 6 date
after meeting the president and his interim cabinet, which he
said had done its job by securing the bailout and a landmark
debt restructuring last month.
“Greece is in the middle of a difficult path,” he said in a
televised address to the nation. “The choices we make will not
only determine which government will be formed after the
election but Greece’s course in decades to come.”
Papademos, a former central banker called in last year when
a socialist government collapsed, told his ministers he hoped a
new parliament, which must pass a slew of tough reforms to
secure payments under the bailout, would convene by May 17.
“The last months proved that faced with great problems and
huge risks we can cooperate and overcome our differences,” he
said.
But the first elections since the debt crisis exploded at
the end of 2009, dragging the country into its worst recession
since World War II and shaking the euro, may be followed by
protracted coalition negotiations.
The conservative New Democracy and the Socialist PASOK
parties – which backed the Papademos government – have lost
public support for endorsing the bailout plan, and may not win
enough votes to form a new coalition.
Opinion polls show that small parties which oppose the steep
wage and pension cuts imposed by the European Union and IMF in
return for aid are gaining ground. A public angry with the cuts
has taken to the streets over the past two years in protests
that have often turned violent.
Party leaders have already started unofficial campaigning,
with conservative leader Antonis Samaras, whose party is ahead
in all opinion polls, telling supporters over the weekend that
he would raise low pensions and create jobs.
“Greece is now the worst condition it has ever been during
times of peace,” Samaras said on Wednesday. “Greek people will
have the chance to determine their future in this election.”
NO OUTRIGHT WINNER
Recent opinion polls show his New Democracy party would win
between 18 and 25 percent of the vote, ahead of PASOK’s 11-16
percent but far behind the socialists’ sweeping 43.9 percent in
the pre-crisis election of October 2009.
Samaras has said repeatedly that he is aiming for an
outright majority and has warned that he might trigger a repeat
election if he does not get enough votes.
Both New Democracy and PASOK back EU/IMF reforms such as
opening up of closed professions, slashing the public sector
workforce by a fifth and cutting pensions, but Samaras said he
would renegotiate some parts of the plan.
Some surveys cast doubt on whether the only two parties that
back the bailout can gather enough votes to renew their
coalition, although this is still considered the most likely
outcome.
Whoever wins the election will have to agree additional
spending cuts of 5.5 percent of GDP – or about 11 billion euros
– for 2013-2014 and gather about another 3 billion euros from
better tax collection to keep getting aid, the IMF has said.
The new government must also implement delayed reforms such
as opening up markets and professions.
The Fund has warned the election poses a political risk,
casting doubt on the implementation of agreed policies.
The Papademos cabinet also discussed on Wednesday how to
boost the capital of Greece’s cash-strapped banks, a vital
condition for the country’s economic recovery.
Highlighting the fiscal challenges of the new government,
budget data on Wednesday showed the deficit widening sharply in
the first quarter of the year, although coming in below target.
In a move that may appease some frustrated voters, a former
defence minister was arrested on money laundering charges.
Television showed images of plainclothes police leading Akis
Tsohatzopoulos, 72, away from his luxurious neo-classical
mansion at the foot of the Athens Acropolis. His purchase of the
house prompted an investigation.
Tsohatzopoulos, who has held various portfolios including
defence since the 1980s, faces felony charges in relation to
property deals and possible tax violations, a court official
said on condition of anonymity. He has denied any
wrongdoing.
(Additional reporting by Harry Papachristou; writing by Dina
Kyriakidou; editing by David Stamp and Philippa Fletcher)
