Greek PM Antonis Samaras pledges to 'forge ahead' as political crisis rumbles on over closure of state broadcaster ERT

EU finance inspector Olli Rehn calls for political unity to ensure wider austerity measures

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The Independent Online

Greece's prime minister has said said he hopes to maintain his shaky three-party coalition, despite a rift over the state broadcaster's closure which threatened early elections.

Antonis Samaras said his overriding priority was to persevere with reforms demanded to keep the country's rescue loans flowing.

Last week, Samaras' government announced the closure of ERT, sacking all 2,656 employees. Both Pasok and the Democratic Left - who support Samaras' conservative-led coalition - objected to the decision.

But matters came to a head last night when the Democratic Left party rejected a compromise that Socialist Pasok accepted.

"I want us to proceed all together, as we started," Samaras said in a televised address after negotiations broke down. "But I will forge ahead in any case."

With Pasok, Samaras' conservatives have a slim parliamentary majority that would allow the government to pass key reforms, including the pledged sackings of 15,000 public sector employees by 2015. It was not immediately clear whether the Democratic Left would remain in the coalition.

ERT's payroll costs have fallen since the country's first bailout in 2010. The broadcaster makes money primarily through adverts and obligatory contributions from all Greeks, whether they own a TV or not.

After years of murky finances, the corporation is now turning a modest profit, and critics argue that sacking its entire workforce makes no financial sense, particularly as the government will have to compensate all laid-off workers.

The closure on June 11 sparked days of protests outside the corporation's Athens headquarters, and was sharply criticised abroad. 

Greece's high court sanctioned ERT's closure but condemned shutting off the signal, in a provisional ruling issued this week. Fired ERT employees protested outside the central Athens court on Thursday as judges met to reach their final decision.

Austerity inspectors from the European Union and the International Monetary Fund are reviewing Greece's progress with reforms, and will return to Athens late next month.

Olli Rehn, the European Commission's top man on financial and economic affairs, said: "It is very important that the Greek government and the administration identify the technical work on the fiscal policies and the structural reforms that need to be adopted before the review can be completed."

He argued that recent stability in Athens has yielded encouraging signs of a recovery for the recession-mired Greek economy.

"I do hope for the sake of the Greek people that this stability will be preserved," he said. "I want to appeal to the sense of responsibility of political leaders in Greece."

IMF spokesman Gerry Rice warned that Greece has just over a month to deliver quickly with pledged reforms to ensure smooth release of bailout payments.

"If the review is concluded by the end of July, as expected, no financing problems will arise because the programme is financed till end-July 2014," he said.