Greece's conservative party leader on Monday vowed to reject any toughening of austerity measures in return for a multi-billion euro bailout, signalling the new coalition government may not enjoy the kind of cross-party support demanded by lenders.
New Democracy leader Antonis Samaras said he would not vote for any new austerity measures and added that the policy mix of spending cuts and tax rises agreed with international lenders should be changed in favour of economic growth.
I agree with the goals to cut government spending ... to reduce debt, to erase the deficit, to make structural changes. I do not agree with whatever stunts growth, he told party MPs ahead of a three-day confidence debate, starting on Monday.
Although Samaras' party are part of the new administration of former ECB vice president Lucas Papademos, its support for the three-day old government has so far been lukewarm and his backing is crucial for passing legislation needed to satisfy international lenders' demands.
Crucially, Samaras said he would not sign any letter pledging support for conditions on a 130 billion euro bailout as EU Economic and Monetary Affairs Commissioner Olli Rehn has demanded.
I don't sign such statements, he said, adding that his word should be sufficient.
His refusal to sign could imperil an 8 billion euro loan Greece needs by mid-December to avoid default.
Sarmaras' hardline stance suggests the continuation of wrangling that pushed Greece to the brink and prompted EU peers to contemplate a euro zone without Greece.
DEMO DERAILS DELEGATION?
Papademos will unveil his new government's main policies later on Monday, before a confidence vote he is expected to easily win on Wednesday thanks to backing from New Democracy, the Socialist PASOK party of toppled prime minister George Papandreou and the far right LAOS party.
The government's task in parliament will be to come up with a plan to convince Greece's rescue lenders that it is worthy of the bailout agreed by euro zone leaders last month before a parliamentary election in early 2012.
But while trying to build cross-party support, Papademos must also convince international lenders Greece is willing and able to take further pain in return for the deal that would also wipe out 100 billion euros of private sector debt.
Inspectors for lenders, known as the troika, were due to meet the new administration following Wednesday's confidence ballot but uncertainty surfaced over whether they would actually come.
Tens of thousands of people angry at more than a year of austerity measures are expected to rally on Thursday, the anniversary of a 1973 student uprising that helped bring down a 1967-1974 military junta.
The march could be the biggest in months of protests and would complicate discussions between the troika and the new cabinet by shutting down central Athens, particularly as violence has erupted at previous rallies.
They may come at the end of the week but nothing is fixed, a spokesman for the European Commission's mission in Greece said of the troika team, which only last Friday had been slated to arrive early in this week.
Without a positive report from the troika, the International Monetary Fund, European Union and European Central Bank may withhold essential loans -- most immediately an 8 billion euro tranche the country needs by mid-December to avert bankruptcy.
Inspectors are responsible for assessing if Greece has hit agreed revenue and spending targets. If Athens slips -- as it has repeatedly in the past -- or the economy weakens, the troika would have to suggest further tough measures.
They will be heartened by news on Monday that the government raised 380 million euros in the sale of mobile phone frequencies -- a fraction of the 50 billion they pledged to raise in privatisations up to 2015, but a start.
The troika is also certain to cast an eye on budget data due out later on Monday that may show a further widening of Greece's central government deficit in the year to end-October.
Contributions to government coffers have dwindled as the economy has shrunk by an estimated 15 percent in the last three years and persistent tax evasion has made for poor revenues.
Greece's jobless rate also jumped to a record 18.4 percent in August, just when hotels and restaurants taking on extra staff during the height of the tourist season should have pushed the rate down.
Papademos, a former vice president of the European Central Bank sworn in on Friday to stabilise Greece's grossly indebted economy, will travel to Brussels on Thursday to meet European finance ministers -- a signal of his focus on the economy.
The 64-year-old was asked to succeed Papandreou, whose proposal to hold a referendum on the country's bailout prompted EU leaders to raise the threat of a Greek exit from the currency bloc.
(Writing by Ben Harding; Editing by Jon Hemming)