Greek PM survives confidence vote in parliament

Wed, 22 Jun 2011 09:41:00 +0000

The Greek prime minister survived a crucial confidence vote early Wednesday, keeping alive a government dedicated to averting a debt default that could spark a financial maelstrom around the world.

Lawmakers voted 155 to 143 along party lines to back Prime Minister George Papandreou, who now faces a critical vote next week on a massive austerity package that Greece's international creditors have said must pass by the end of June.

He is seeking euro28 billion ($40.24 billion) in budget cuts and new taxes and euro50 billion worth of privatization of public assets. Unless the new measures pass, Greece will not receive the next batch of bailout funds, worth euro12 billion, and will face a disastrous default in July, when it runs out of money.

A default by Greece could drag down Greek and European banks and renew fears over the finances of other eurozone countries such as Portugal, Ireland and Spain.

Papandreou must still convince all the lawmakers from his Socialist party to support the austerity bill, which has provoked strikes, riots and a slump in his popularity. While all 155 Socialists voted in favor of the confidence motion, several have publicly criticized the austerity measures and at least one has said he will not back them.

Greek crisis eases after government reshuffle

Fri, 17 Jun 2011 16:35:00 +0000

Greek Prime Minister George Papandreou replaced his finance minister Friday in a broad cabinet reshuffle that won strong support from markets, optimistic that crucial austerity measures will now be passed to prevent a devastating near-term debt default.

After two days of political chaos that threatened to bring down the government, Germany also appeared ready to provide billions more in aid to carry the debt-ridden country through 2014. German Chancellor Angela Merkel indicated that the private sector would not be forced to share in the pain of a second bailout.

Together, the developments in Athens and Berlin boosted hopes Greece will get a second bailout and avoid a default, which at one point on Wednesday seemed to be just weeks away. Yields on Greek 10-year bonds dropped more than a percentage point to the still sky-high level of just under 17 percent, while the Athens Stock Market closed up 3.8 percent at 1,254.02.

Despite the more benign market backdrop Friday, Greece faces years of trying economic times if it is going to get on top of its euro350 billion debt mountain.

"The country must be saved and it will be saved," said Evangelos Venizelos, who moves from the defense ministry to take over the reins at the finance ministry. "I am leaving defense today to go to the real war."

Salon.com > Derek Gatopoulos

Greek PM survives confidence vote in parliament

Greek crisis eases after government reshuffle