Greek PM facing confidence vote
Greek Prime Minister George Papandreou is facing a crucial confidence vote in parliament today a day after he backed down from his bid to put a new European debt deal to a referendum.
The ruling party has a ajority of two in the 300-seat assembly, but one Socialist MP has said she will not back the government.
A Socialist revolt and international pressure forced Mr Papandreou to drop his plan for a referendum on the latest bailout agreement, worth €130bn.
Mr Papandreou sparked a global crisis when he announced the referendum on Monday, as investors feared that rejection of the hard-fought debt relief plan would force a disorderly Greek default.
The political drama has horrified the indebted country’s European partners and overshadowed the Group of 20 summit in Cannes.
The threat of a Greek default spooked global markets and worsened a continental debt crisis that has already forced massive bailout deals for Greece, Ireland and Portugal.
The new debt deal in rescue loans from the rest of the eurozone and the International Monetary Fund comes on top of the €110bn it was granted a year ago.
It would also see banks write off 50% of the money Athens owes them, some €100bn. The goal is to reduce Greece’s debts to the point where the country is able to handle its finances without constant bailouts.
If the deal stalls, Greece will not get the next instalment of its loans and will probably go bankrupt before the year is out.
Mr Papandreou has given no indication that he plans to resign quickly, although he said on Thursday night he was not “glued to his seat”.
But both his Socialist party and the opposition conservatives are talking about elections – though they differ strongly on the timing.
A senior Socialist MP said today that if the government wins the confidence vote, it can then launch talks with the main opposition conservatives on forming a caretaker administration to lead the country through the next few crucial months, when Greece must approve the bailout and thrash out debt write-off details with banks.
Christos Protopappas said elections could then be held in February or March.
“We need three or four months ... to rationalise the situation, restore calm to the country, get rid of that €100bn in debt and build international credibility,” Mr Protopappas said.
“Then we can get back at each others’ throats for a month with elections – at that point everyone will be able to wait for us.”
The conservatives don’t want to wait. An angry New Democracy party leader Antonis Samaras insisted that Mr Papandreou has to go now, and demanded snap elections – within the next six weeks if possible.
“Mr Papandreou pretends that he didn’t understand what I told him,” he said. “I called on him to resign.”
Mr Protopappas argued that holding early elections now would drive Greece to bankruptcy.
“The electoral process takes about 40 days, and soon we be unable to pay salaries and pensions, while nobody will be able to negotiate with us on the bailout agreement,” he said.
Polls indicate the Greek public is close to the breaking point after more than 20 months of harsh austerity cuts and tax hikes.
A wave of general strikes and protests have often degenerated into riots. Recent opinion surveys show 90% of Greeks oppose Mr Papandreou’s policies and his party has just 20% public support.
A Communist-party backed labour union is organising a protest outside parliament later today.
