Hopes dashed as Greece failed to form unity government

Despite President Carolos Papoulias’ repeated attempts to save Greece from further chaos, the front-line party heads have failed to form coalition government. This has happened as a result of the failure of the political parties to reach a consensus on the controversial Greece bail-out deal.

The meeting held at the Presidential mansion on Sunday was attended by three of the most prominent Greek leaders. They were the conservative leader Antonis Samaras, the extreme leftist Syriza chief Alexis Tsipras and the socialist Pasok leader Evangelos Venizelos.

The talk which was aimed at ironing out differences between major political parties on fiscal pact, soon reached an impasse as leaders started blaming each other on the highly controversial bailout agreement and stiff spending cuts. While, the 37-year old Alexis Tsipras riding high on ‘anti-austerity wave’ clearly and completely rejected any negotiations with pro-bailout leaders, Conservative leader Antonis Samaras accused Tsipras for the current standoff. It has also been reported that Tsipras has given the assurance of pulling out of the bail-out deal without giving up Euro.

As per the latest news, the President of Greece is expected to hold another round of fresh talks with the political parties on Monday. Though only a slim chance remains, but if Greece succeeds to form a new government before the Thursday deadline, it might be able to avoid a repeat election and, perhaps, stay in the euro zone.

Italian PM Mario Monti’s austerity drive gets lower house approval

Prime Minister of Italy, Mario Monti’s austerity plan cruised to victory in the Chamber of Deputies’ confidence vote on Friday. The overwhelming victory of 495 to 88 in the lower house is expected to increase Italy’s chance in receiving bailout package amounting to € 33-billion or $43 billion. Mario Monti still has to get the final approval of the Senate (upper house of the parliament) next week for the smooth passage of austerity package.

Italy’s ‘Super Monti’ is currently under immense pressure from leaders of Europe to put a cap on spending and generate funds to boost Italian economy. Once the austerity bill is passed by both houses of parliament, Mario plans to implement a series of measures to address Italy’s huge debt crisis and balance 2013 budget through increased tax and pension reforms. Some of the immediate steps government of Italy is likely to take are - reintroducing ‘tax on first homes’ (earlier abolished by the previous Berlusconi government), hiking real estate tax and also some growth incentives.

Though Italian Premier’s austerity plan enjoys parliamentary consensus, many in the main opposition parties are skeptical that the proposed measures might be unfair on the poor in society. They are going to be the hardest hit of the austerity cut.