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George Papandreou
The prime minister put his case to the peopleImage: dapd

Pressing on

June 17, 2011

The Greek prime minister struggled to unite his party behind him on Thursday amid discontent over austerity measures. He needs to get the bill passed, if Greece is to get the latest tranche of an EU/IMF bailout.


Greek Prime Minister George Papandreou appeared to be struggling to hold his government together after two of his party's members of parliament resigned on Thursday.

In an address to an urgently called meeting of deputies from his Socialist party, Papandreou appealed for unity, as he seeks to win parliamentary approval for a key package of tough austerity measures.

"The challenge before us, the moment we are facing, is historic. Either Europe will make history or history will wipe out the European Union," he said.

He said that despite growing criticism from within his own party, he would press on with his planned cabinet shuffle. His new government is to face a vote of confidence on Sunday.

Tough conditions

The government has come under increasing pressure over the austerity measures, which are required to meet conditions set out by the International Monetary Fund and the European Union as part of their 110-billion-euro ($156 billion) bailout for Greece.

The bill Papandreou is trying to get through parliament is worth 28 billion euros in spending cuts and new taxes. It would also see another 50 billion euros raised by selling off state assets.

Mass demonstrations against the measures turned violent on Wednesday, with some protesters fighting pitched battles with riot police on the streets of Athens. Trade unions also called their workers off the job in a 24-hour general strike.

Papandreou responded by offering his resignation in a bid to get the conservative opposition to join a government of national unity and back the reforms. After that effort failed, he announced the cabinet shuffle.

Low-key crisis management

Deutsche Welle's Athens correspondent, though, says it's not entirely clear how effective the prime minister is being in trying to come to grips with the crisis.

“He is trying to manoeuvre out of it but he is following events rather than setting the tone of events,” Anthee Carassava said. “He was dragged into this urgent meeting of the Socialist lawmakers because it was demanded of him, and he did not come in with a very stiff make or break kind of speech. He came in with a very mild mannered tone, trying to woo them or cajole them into supporting him.”

European Commissioner for Economic and Monetary Affairs Olli Rehn
Rehn's words must have been music to Papandreou's earsImage: dapd

The uncertainty about Greece's government is made even worse by the fact that a key meeting of EU finance ministers is set for Sunday. It's still far from clear who will represent Greece at those talks.

“We don't know whether the finance minister will be sacked in this reshuffle, we don't know if the prime minister will be in his seat,” Carassava said. “Although Papandreou is obviously determined to stick to his guns and fight it out and try to go it alone.”

There was one bit of good news for Greece on Thursday: In a statement that appeared to be designed to ease jittery markets, the European Union's monetary affairs commissioner, Olli Rehn, said eurozone countries will likely agree on Sunday to pay Greece the next 12-billion-euro tranche of its first bailout. That would ward off the immediate risk of default.

Author: Chuck Penfold (dpa, Reuters, AFP)
Editor: Susan Houlton

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