Bailout for Banks Figures Into Campaigns in Greece

Greece’s two main party leaders used the Spanish bank-bailout deal Sunday to support their opposing messages to the Greek electorate ahead of next week’s national vote.

New Democracy leader Antonis Samaras said the deal showed how important it is for the country to remain inside the European Union, negotiate with its partners over the country’s problems and not isolate itself, while the radical leftist Syriza party said it showed that the only prosperous route for Greece is to reject the terms of the country’s own massive bailouts.

Spain said Saturday it would ask Europe for a loan in order to clean up its banking industry, becoming the fourth euro-zone country to request an EU bailout after Greece, Portugal and Ireland. Spanish Finance Minister Luis de Guindos said the EU will grant Spain a loan of as much as €100 billion ($125 billion) that the government will funnel to banks that need capital.

European governments had put intense pressure on Spain to agree to a support package for banks that have suffered in a real-estate crash ahead of the Greek elections June 17, which they fear could send a new wave of turmoil through the region’s financial markets.

The conservative New Democracy party is pledging to stick by terms of the Greek bailouts, meaning harsh austerity measures, while the Syriza party, which emerged as a political force during last month’s inconclusive elections, wants to renegotiate the terms. The election this month is being viewed as a de facto referendum on Greece’s future inside the euro zone, pitting the Syriza party against New Democracy and Pasok, which together support the reform program Greece has pledged to its euro-zone partners and the International Monetary Fund.

“While a country like Spain negotiates, there are some people here who argue that we must break things with Europe and isolate Greece,” Mr. Samaras said while campaigning in southern Greece. “But fortunately, apart from the path of irresponsibility, there is the road of responsibility.”

Responding in a statement, Syriza said that “the conclusion that is drawn from the developments in Spain is the complete opposite from what Mr. Samaras perceives.”

“The only route of dignity and prosperity for the European people is to reject the policies of austerity and recession and not that of accepting as whole the memorandum commitments, as Mr. Samaras does,” the statement said.

Syriza leader Alexis Tsipras told the Avgi newspaper in an interview on Sunday that events in Spain justify its party’s position.

“Namely, that the crisis is a pan-European problem and that the way it has been dealt with until now has been completely ineffective and socially disastrous,” he said.

Pasok Leader Evangelos Venizelos said that “what happened in Spain has great impact on Greece.…It shows that a safety net for the euro zone is being prepared.” He added that at the moment “negotiations are taking place without Greece” because the country is lacking a government.


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