Papandreou Survives Confidence Vote, Coalition Looms

ATHENS – After delivering the speech of his life with a plea for divided Greeks to rally round the flag and keep international aid coming, Prime Minister George Papandreou was given a vote of confidence in Parliament early Saturday morning after saying he would work with his rivals – but maybe not the major opposition Conservative New Democracy party – to set up a unity government. Papandreou had been on the ropes after some of his own PASOK Socialist party Members of Parliament said they might vote against him after he announced – and then withdrew – plans for a referendum to let Greeks vote on whether to approve a second bailout, of $179 billion, from the Troika of the European Union-International Monetary Fund-European Central Bank, and the punishing austerity measures that came with them. With a bare majority of 152 members, he got 153 of 298 votes, with two members absent.

That bought him time to try to negotiate a new coalition government, but that may be with smaller parties after preliminary talks with New Democracy broke off when he refused to step down while a unity government was formed. He denounced New Democracy in a 45-minute address before the vote,  in which he blamed his political opponents for creating most of the economic upheaval which led Greece to seek and receive an initial bailout of rolling rescue loans of $152 billion last year, that came with conditions of big pay cuts, tax hikes, slashed pensions, and now layoffs of scores of thousands of public workers in Greece’s hugely-bloated civil workforce, one of the prime reasons the country is technically bankrupt.

Papandreou warned that unless he were given the vote of confidence and time to set up a unity government and set a timetable for new elections that Greece would not get an $11 billion loan installment due this month and another $110 billion in February. Without both, Greece will not have enough money to pay its workers and pensioners as it struggles to get out from under a $460 billion debt and more than 10 percent deficit, caused by generations of packing public payrolls with political hires and failure to collect monies from tax evaders, said to be as much as $40 billion a year. He had secured a second bailout of $179 billion last month from the Troika, but that came with demands for more austerity that had outraged Greek society.

Papandreou said his government had cracked down on those who wouldn’t pay taxes but that, and the effects of the austerity measures that have created a deep recession with more than 17 percent unemployment and more than 100,000 businesses closing in the last 18 months, have combined to bring in lower revenues, despite across-the-board tax hikes, including on the poor, and an income tax surcharge. Tax revenues fell 6.9 percent in October, prompting the government to say he would not pay individuals and businesses due tax refunds.

Papandreou quelled a revolt in his party after pledging to seek an interim government he said was essential to approving the second bailout agreed upon in October by leaders of the Eurozone, the 17 countries using the euro. Papandreou managed to survive what seemed his imminent resignation a day earlier when the referendum idea blew up in his face as he came under a blistering attack by European leaders, his own Finance Minister Evangelos Venizelos, who warned it could lead to Greece being kicked out of the Eurozone, and dissent within the ranks of PASOK MP’s. It was reported that Venizelos may now head the party, two years after failing to take the helm in a bitter battle with Papandreou, who had lost twice to former New Democracy Prime Minister Costas Karamanlis.

The prime minister said he would visit the country’s President Karols Papoulias on Saturday, Nov. 5, to launch power sharing talks “with the (opposition) parties … for the formation of a government of broad cooperation.” The vote came after a roller-coaster ride of political maneuvering that left Greeks attached to their television sets wondering whether the government would survive, get the foreign aid the country needs to stay afloat, be forced out of the Eurozone and return to its ancient drachma, or even be booted out of the European Union.

“We, the Socialist party deputies, carried the cross of reform … But one group in parliament is not enough. This great task requires sincere and broad support,” Papandreou said, stressing the transition must be as smooth as possible. “The priority is the security of the country — continued (rescue) funding, adhering to the debt deal and our continued presence in the euro, and all other initiatives need to avoid danger for the nation.” He said his main interest was to stabilize the country’s economy, and he was open to negotiation as to who would lead the new government. “We must proceed in an organized way. And regardless of developments, the country must be governed tomorrow without turbulence,” he said. “I seek the vote of confidence tonight to safeguard a steady course for the country — with no power vacuum, without being dragged to election,” he said shortly before the post-midnight balloting. Greeks have taken to the streets with protests, riots and strikes over the austerity measures but were equally fearful, polls indicated, of leaving the Eurozone, creating what seemed to be an insoluble dilemma over the referendum, which roiled more anger and anxiety.