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Greek Prime Minister Survives Confidence Vote in Parliament

 

Greek Prime Minister George Papandreou survived a confidence vote in parliament early Wednesday, winning a gamble on his government's survival and the danger of a devastating debt default that could spark a financial maelstrom around the world.

Papandreou had called the vote, which passed early Wednesday morning, to face down an internal party revolt and help him pass deeply disliked austerity measures that have provoked strikes, protests and a slump in his popularity.

Lawmakers voted 155-143 for the motion, with two abstentions in the 300-member legislature, sticking strictly to party lines after a heated debate that saw sections of the opposition briefly walk out of the chamber.

Outside, several thousand protesters chanted "Thieves! thieves!" and other anti-austerity slogans, shining green laser lights at the parliament building and into the eyes of riot police protecting it.

A loss would have likely led to early elections and thrown into question whether Greece could pass a crucial but deeply unpopular new austerity bill by the end of June as demanded by the country's international creditors. Unless the new measures pass, Greece will not receive the next batch of funds from its bailout, and will face a disastrous default.

A default by Greece could spark a financial maelstrom around the world, dragging down Greek and European banks as well as stoking renewed fears over the finances of other eurozone countries, such as Portugal, Ireland and Spain.

Expectations that Papandreou would win lifted world markets earlier in the day. His Socialist party holds a five-seat majority in the 300-member legislature.

Greece is being kept financially afloat by $157 billion package of bailout loans granted by other eurozone countries and the International Monetary Fund last year, and has implemented strict austerity measures in return, cutting public sector salaries and pensions, increasing taxes and overhauling its welfare system.

But the country has struggled to meet it targets, missing many, and is now in negotiations for a second bailout, which Papandreou has said will be roughly the same size as the first.

Officials from the IMF, European Commission and European Central Bank who have been overseeing Greece's reforms were in Athens Wednesday to discuss the new austerity measures, which will run to 2015, two years beyond the current government's mandate.

Speaking during the debate ahead of the vote, Papandreou acknowledged the austerity measures were tough.

"At this time of pain I want to send a message to all Greeks," he said. "Yes, the course is difficult but there is light at the end of the tunnel."

Papandreou reshuffled his Cabinet last week and replaced his finance minister to ease growing dissent within the governing party and growing anger on the street which has led to riots, the latest last Wednesday.

On Tuesday the new finance minister, Evangelos Venizelos, promised that parliament will pass the unpopular austerity package by the end of June in order to comply with European Union demands to receive the next payment in its bailout loan.

Venizelos said Parliament is set to vote on $40.2 billion worth of budget cuts and other savings next week.