* Prospect of elections over state broadcaster ERT recedes
* Standoff weakened PM Samaras, emboldens coalition partners
* Squabbling over terms of reopening state broadcaster continues
By Renee Maltezou and George Georgiopoulos
ATHENS, June 18 (Reuters) - Greece has avoided the uncertainty of an early election but the standoff over the state broadcaster’s closure has weakened the prime minister and deepened mistrust in his fractious coalition.
A court ordered the ERT broadcaster back on air late on Monday as Prime Minister Antonis Samaras and his partners moved towards a compromise, ending a six-day impasse and easing fears of snap polls that would have plunged Greece into a new crisis.
Greeks and investors breathed a sigh of relief, with the main Athens stock index rising 2.8 percent on Tuesday, far outperforming European stock indexes, while yields of benchmark 10-year bonds were steady at 10 percent.
But the repercussions from Samaras’s sudden shutdown of ERT in a bid to save money and please foreign lenders were set to grow as the three parties in the coalition resumed bickering over how exactly ERT must restart.
Analysts say Samaras appeared to have gambled that he could force through ERT’s shutdown since his allies could not afford to go to elections, but had to backtrack in the face of an open revolt by his coalition partners and growing public protests.
“Samaras backed down and he must thank God for the court decision which allowed him to climb down without losing face,” said political analyst John Loulis.
“Samaras overplayed his hand -- the coalition government will be even more fragile now than it already was.”
Samaras switched off ERT and fired its 2,600 staff to meet a public sector layoffs target set by Greece’s lenders. ERT was “sinful”, “wasteful” and “full of scandals”, he said.
An outcry from unions, journalists and the PASOK and Democratic Left parties in his coalition followed, with tensions defused only after three-hour talks on Monday and a court decision that came in time to save face for all three parties.
The court said the government had the right to shut down ERT with the purpose of setting up a new, leaner successor. But the ruling also vindicated Samaras’s partners by saying that a new, transitional broadcaster must immediately resume programmes.
“It’s difficult to find a winner from all this,” said ALCO leader Costas Panagopoulos. “ERT was a catalyst that revealed insufficient cooperation between coalition partners.”
“Compromise with the help of a court decision,” Greece’s top-selling daily Ta Nea said on its front page.
The indebted country is kept afloat by aid from the European Union and International Monetary Fund that allowed it to avoid bankruptcy last year. In return, Athens has promised a raft of reforms, including overhauling its bloated public sector.
In return for their support, Samaras offered his partners in government a cabinet reshuffle and promised to update their coalition agreement to reassure them that it would operate in a more collegial way.
However, the ERT crisis has yet to blow over. Its radio and television channels remain off air and the coalition disagrees over how exactly to implement the court decision.
Political leaders have set a new meeting for Wednesday to iron out their differences.
PASOK and Democratic Left insist that ERT must immediately go back on air exactly as before - similar to 24-hour broadcasts that ERT’s staff have defiantly continued over the Internet during the shutdown.
“Public television should have started operating yesterday, the radio and television shows should have started broadcasting as well as ERT’s websites,” Democratic Left said in a statement.
“All ERT frequencies should have been active. Not executing the temporary order is an illegal act.”
But Samaras’s conservative New Democracy insists the transitional, stopgap broadcaster will run just a few ready-made programmes, in line with a concession he had offered previously.
“Even transmitting a logo would be enough to comply with the court decision,” one New Democracy official told Reuters.
Barely out of the woods from its last crisis, the coalition appeared to be gearing up for yet another battle on the issue.
“They (New Democracy) are working to create the next crisis and we’ll prevent that,” PASOK deputy Dimitris Karydis said.