Greece in new turmoil as coalition ally pulls out

By Nicholas Paphitis

Associated Press

Published: Friday, June 21 2013 12:00 a.m. MDT

"But that said, of course this news is putting the stability of the government into jeopardy," she told the AP. "There is a well-known financing gap in the (bailout) program that people are starting to pay attention to. So this adverse political news is not a welcome development and it is posing risks in the period ahead."

The turmoil sent Greece's borrowing costs up Friday, while shares on the Athens Stock Exchange closed 6.11 percent lower. The interest yield on the country's benchmark 10-year bond — an indicator of investor confidence in a country — reached 11.29 percent Friday. Greece has been priced out of the bond market for three years.

Debt inspectors have suspended a review of Greece's public finances amid the political crisis, while the IMF warned Thursday that loan payouts could be affected if that review does not restart soon.

Samaras' ordered ERT's closure on June 11, shutting off its signal and firing nearly 2,700 employees as the country embarks on a second stage of painful cuts likely to focus on reducing the size of the public sector. He later said about 2,000 people will be kept on for three months until ERT's replacement is set up.

Greece has pledged to sack 15,000 public sector workers by 2015.

Kedikoglou, the government spokesman, said if protesting staff occupying ERT's buildings leave, the new broadcaster can be transmitting in a couple of days. Authorities have urged employees to vacate the facilities, but it is unclear what will happen if they refuse.

AP Writer Juergen Baetz in Luxembourg contributed.

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