Greek PM wins vote

2011-11-05 08:21

Athens - Greek Prime Minister George Papandreou survived a parliamentary confidence vote on Saturday, avoiding snap elections which would have torpedoed Greece's debt crisis bailout deal and inflamed the euro zone's economic crisis.

But the nation remained mired in political, social and economic turmoil and Papandreou signalled he would stand down, calling for a new coalition to ram the 130-billion-euro bailout deal through parliament and avoid the nation going bankrupt.

Papandreou's socialist government won with 153 votes in the 300 member parliament, and a rebellion by some dissidents in his PASOK party failed to materialise after he indicated that his term as prime minister was close to an end.

"The last thing I care about is my post. I don't care even if I am not re-elected. The time has come to make a new effort ... I never thought of politics as a profession," he told parliament before the vote.

Papandreou said the new coalition government should secure the approval of the euro zone bailout deal, the nation's last financial lifeline, which is also the euro zone's central plank to prevent economic crisis devastating the bloc's bigger economies.

Warned by France, Germany

The leaders of France and Germany told Papandreou earlier this week that Greece would not get one more cent of EU aid if it failed to approve the bailout, meaning that the state would run out of money in December.

Papandreou told parliament that he would go to the Greek president on Saturday to discuss formation of a broader-based government that would secure the euro zone bailout, adding that he was willing to discuss who would head a new administration.

The meeting will take place at noon.

Papandreou dismissed demands for rapid elections as championed by the opposition. "Elections at this moment not only equal disaster but could not take place in the best interest of the people," he said.

"There is one solution. To support the (EU bailout) deal with a multiparty approach, without elections, with a strong government."

Investors took fright

Greece has been racked by torment since soon after Papandreou won power in 2009 and revealed that the real budget deficit was three times bigger than original estimates put out by his conservative predecessor.

International investors took fright, Greece's borrowing costs soared and Papandreou was forced to go cap in hand last year to the only bodies still willing to lend at affordable rates - the European Union and IMF.

In return they demanded wave after wave of spending cuts, tax rises and pension cuts which provoked widespread protests on the streets on Greek cities, with bloody clashes between demonstrators and riot police in Athens.

On financial markets, analysts said Papandreou's victory had been Pyrrhic, and many ordinary Greeks said they were disenchanted with Byzantine political wrangling that was not addressing their basic shortage of jobs and cash.

"Even though he has won the vote, he engaged in a game of brinkmanship ... All that means to me is that his days in power are numbered," said Jurgen Odenius at Prudential Fixed Income, in Newark, New Jersey.

New government

"At least, though, the worst has been avoided, where no new government was formed and Greece gets pushed into default. So at least we're back to where we were before."

Sources said Finance Minister Evangelos Venizelos has won the backing of leaders of some smaller parties to support a new coalition that he would head. The new government would call early elections in a few months after the bailout had been secured, sources close to the deal told Reuters.

The leaders of the far-right LAOS party and another centre-right party indicated after Papandreou's speech that they would co-operate in a new coalition.

In parliament, Venizelos said a new government should rule until next February and then call elections.

Opposition leader Antonis Samaras counted his New Democracy party out of the coalition, saying Papandreou had spurned his call for a national unity government. "Mr Papandreou rejected our proposal. The only solution is elections," he said.


Papandreou provoked uproar at home and abroad on Monday when he announced a referendum on the bailout, agreed by euro zone leaders only last week.

Under heavy domestic and international pressure, he backed down on a vote which could well have rejected the deal, potentially sinking euro zone leaders' attempts to stop the debt crisis devastating economies such as Italy and Spain.

The government officially announced earlier on Friday that the referendum would not go ahead. 

  • Yar - 2011-11-05 09:09

    Hey Greeks - time to catch a wake up. Time for all your lazy communist demonstrators to go home and be good citizens. Time for you to pay a fair amount of tax, so that your government can actually pay its bills. And if it means that you have to leave the Eurozone and the EU then do it. Time to pay back what you borrowed. The lenders can't be expected to fund your lifestyle. As for trying to duck the issue by having a referendum next year, this is a cheap trick. Disgusting behaviour.

  • Mthuthuzeli - 2011-11-05 09:24

    It's about time, amid all this turmoil, that politicians started looking back towards their electorate rather than pandering to the markets. Sure the financial industry is important and it presages much that happens in the economy, but at the close of play what matters more are people's lives. Condemning Europeans to a decade of austerity because this is 'what the markets expect' suggests strongly that the system is failing. I was happy that the Greek people would have got a chance to decide if they wanted to live as slaves in permanent debt servitude to a handful of bankers that can't bring themselves to take losses. A government talking about listening to it's people? Surely not!

      Yar - 2011-11-05 10:40

      @mthuthuzeli The greeks as a nation have spent more than they pay in tax. Mainly because so many of them cheat on their taxes. The balance they have borrowed. Are you expecting the lenders to just write off the debt. If the lenders have to just write it off, then the greeks will never be able to borrow again. The funds don't always belong to fat cat bankers. Those funds belong to people who have saved and invested, and they belong to shareholders. Some of those shareholders are pension funds. You see the greeks as slaves to a handful of bankers. I see them as a group of people who have borrowed more (other peoples money)than they can afford and now don't feel like paying back. They also expect the rest of the world to crash into recession so that they can avoid paying back. What do think?

      Annette - 2011-11-05 10:45

      No wonder nobody is going dignify ur stupidity with a comment

      Spyker - 2011-11-05 12:00

      @Mthuthuzeli.., Your stupidity is only matched by your ridiculous headgear. The Greek situation is the consequence of ONE factor only – is PEOPLE who are lazy.., kindly take note of the key element = PEOPLE..! Your (now typical) veiled anti-capitalism rhetoric serves little more than to underscore your sub-80 IQ – ie the absolute maximum allowed to pass the ANC’s “political exam” and beyond that allowed in the ANCYL, but I am sure they felt sorry for you because you are too intelligent by their sub-50 standards. Why is the same not happening in Germany..? Or in France..? Or in the Netherlands..? Laissez-Faire Capitalism has NEVER existed as a formal economic system – it is therefore impossible to criticise it. Capitalism however, is a system that solidly – viz without prejudice – rewards bona-fide innovation, -hard work, - mental power (eg NOT fake qualifications rewarded by virtue of skin-colour) and alike. None.., I repeat NONE of these elements are present in the ANCYL and by-and-large absent in the ANC as a whole. Capitalism – as it was seen at its peak up to the 70’s and 80’s (until it was leached dry by the same people who are now slating it) had developed totally naturally. It is in fact the only economic “system” that had evolved naturally – as it is ‘naturally’ the closest to nature and ultimately it mirrors the laws of nature. Jump out of an aeroplane without a parachute and you will quickly see what happens if you defy the laws of nature. cont. below..,

      Spyker - 2011-11-05 12:09

      It is (as) natural for the stupid, lazy, fornicating, feckless mobs to attempt to protect themselves against “capitalism”; or for such inept mobs to parasite off those who are the natural beneficiaries of a system that rewards natural superiority – like the ANC is doing today. THEY WILL HOWEVER FAIL – IF NOT SPECTACULARLY, then in a blaze of humiliation... SA under the ANC will go exactly the same way as Greece, BUT.., the final outcome will make Zimbabwe look like Monte Carlo. SA is not under siege of mobs of lazy people, NO.., it is under siege of LAZY, STUPID, FORNICATING MOBS that have ZERO economic worth. The ANC created these mobs and they do not possess the cognitive capital to COPE (yes, pun intended) with it. You, my mortal foe, are the idiot of the most ostentatious kind – ie HE WHO DOES NOT KNOW THAT HE DOES NOT KNOW...

      Mthuthuzeli - 2011-11-05 12:11

      @Annette You have the temerity of an imbecile when all you can do is penn one or two sentences of insult. @Yar Iceland has suffered an especially terrible punishment for not sticking to the Way of the Markets. Iceland was a country wrecked by implementing free-market dogma crudely and quickly; it may yet became another such lesson of how an economy can ignore free-market dogma – and come out far better than its critics predicted. Sovereign and corporation defaults are part of tooth and nail capitalism - you lend money to someone who's a poor credit risk and you risk losing your money. It's funny how the Milton Friedman neo-liberals love free-market liberalism except for when it costs them money....then it's regulation regulation regulation.... The high interest internet depositor's returns compensated for the risks. That's the way capitalism works, doesn't it? Like low returns on regular savings accounts reflect low risk. Reject bail-outs which simply prop up banks and which give the materialists further opportunity to buy assets. Default is the honourable option. It will preserve dignity, sovereignty and assets. That might sound like a recipe for disaster, but Argentina defaulted in 2002, froze the banks, declared its foreign debts void, and cut itself off from IMF funding – and since then, it's been one the fastest-growing economy in fast-growing South America.

      Yar - 2011-11-05 12:43

      @mthuthuzeli I understand how Iceland became a victim of an economic meltdown. It is a small and isolated economy and had no way of defending itself. Greece is a different case. It needs to clean up its' act very quickly. Far to highly unionised and socialised. It simply cannot support its' lifestyle on an economy which is based on olive oil and tourism. Sadly for the economic left, Market forces are a natural reality. The laws of supply and demand are immutable and unavoidable. Long live the free market.

      MichaelH - 2011-11-05 12:51

      "Iceland was a country wrecked by implementing free-market dogma crudely and quickly; it may yet became another such lesson of how an economy can ignore free-market dogma..." Really @Mthuthuzeli? Do you have even the faintest clue what you said or did you just copy and paste that from I detect a HUGE troll intruder alert :p

      Mthuthuzeli - 2011-11-05 14:19

      @Yar Granted, there may be certain ways in which the incentive of profit may be helpful in economic development, but that incentive, in the history of the “free market” in the world, has had horrendous consequences. It led, throughout the centuries of “Western Civilization,” to a ruthless imperialism. People who claim to believe in “free markets,” do not believe in a free marketplace of ideas, any more than they believe in a free marketplace of goods and services. In both material goods and in ideas, they want the market dominated by those who have always held power and wealth. They worry that if new ideas enter the marketplace, people may begin to rethink the social arrangements that have given us so much suffering, so much violence, so much war these last 500 years of “civilization.” Capitalism' and 'free market' are not totally synonymous. One version of capitalism is the one we have - manipulation of the markets and society in favour of the few who have the capital. 'Free market' for the poor, 'socialism' for the rich. High taxes for the poor, low taxes for the rich. In a truly capitalist society, the too big to fail banks would have gone to the wall.

      Yar - 2011-11-05 17:57

      @Mthuthuzeli Profit is not jusr useful in an economic system, it is absolutely essential. Useful, ha. You have been Karl Marx's worthless text books. No profit = disaster. Once any entity stops making profit, it is only a matter of time before failure ensues. Stop cutting and pasting that socialist garbage. Go and find an economic model that works. You and you socialist/communist buddies will lead us to ruin. The key question that socialist economics strives to answer, is what to do when you run out of other peoples money.

      Mthuthuzeli - 2011-11-06 11:27

      People who claim to believe in “free markets,” do not believe in a free marketplace of ideas.

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