Greek Lawmakers to Decide PM's Fate
Business + Economy

Greek Lawmakers to Decide PM's Fate

ATHENS — Weary Greeks looked ahead at a long day of political wrangling on Friday before a confidence vote that could determine whether Greek Prime Minister George Papandreou remains their leader through the current financial crisis.

The vote, which will take place in Parliament in the evening, is far from assured. A day after Papandreou backed away from a proposal to hold a referendum on a European bailout plan. His move removed a significant obstacle that had rattled global markets and imperiled plans to halt a spreading economic crisis, but it came only after much of his already-wobbling support had washed away.

Thursday was filled with political intrigue and drama, and by its end, Greek politicians for the first time had coalesced around the rescue deal after the opposition dropped its objections. But the plans still require Parliament’s approval, and politicians remained at odds over whether Papandreou would stay or go. The opposition has called for elections by the end of the year, which Papandreou opposes, suggesting that the deal could still fall apart.

On Friday, several senior officials from Papandreou’s Socialist party said that if the prime minister survives the confidence vote, they would call for elections in three or four months, after the immediate uncertainty about Greece’s bankruptcy is resolved.

Greece appears far more likely to participate in the bailout than it did just days ago, when the prospect of a December referendum meant uncertainty lingering for weeks. Instead, European leaders can move on to other pressing issues, such as how to bolster Europe’s bailout fund to guard against shakiness in Italy and Spain.

But the political instability within Greece could still delay the precise contours of the plans. If Papandreou loses the vote Friday night — a distinct possibility, since Socialists controls only 152 of the 300 seats of Parliament, and one Socialist deputy has already sad she would vote against him — the prime minister would likely be forced to step down in favor of a caretaker government, with elections following shortly thereafter.

On Friday, several Socialists indicated that their support for Papandreou came with the caveat that new elections must be held early next year. Three or four months would give Greece time to “rationalize the situation, restore calm to the country, get rid of that 100 billion euro debt and build international credibility,” said the Socialists’ chief whip, Christos Protopappas, on state radio. “Then we can get back at each others’ throats” for the elections.

Other top Socialist officials echoed Protopappas’s remarks. Papandreou told parliament Thursday night that he was not “glued to his seat.”

Papandreou’s proposal to hold a national referendum on the bailout plan, a vote that would also determine Greece’s future in the euro zone, had caused fissures within his Socialist party and sent shock waves through Europe. In Frankfurt, Germany, the European Central Bank said Thursday it would lower interest rates by a quarter percentage point, indicating deep concerns about Europe’s outlook. In Cannes, France, where leaders at the Group of 20 summit had warned they would cut off all support to Greece until the referendum was resolved, the drama dominated discussions.

In a speech to Socialist party officials Thursday evening, Papandreou said shooting down the bailout plan “means leaving the euro.”

“If the opposition is willing to negotiate, then we are ready to ratify this deal and implement it,” he said, adding that he had invited the main opposition party to be “co-negotiators” with his country’s creditors.

After he spoke, Finance Minister Evangelos Venizelos said the Socialists would ask for 180 votes in Parliament, rather than a simple majority of 151 votes, to approve the package. Those moves would need to come before Greece runs out of money, which is pegged for mid-December, but would probably come as soon as the two main political parties reach terms.

Papandreou’s plan for a national bailout referendum had effectively halted the flow of European aid to Greece and endangered the country’s participation in the euro zone. The move away from the referendum stemmed from the opposition’s new willingness to agree to a bailout, as well as intense disagreements within Papandreou’s party.

Papandreou told his fellow Socialists that he trusts “the wisdom and the maturity of the Greek people . . . more than what is now called the political establishment.”

Antonis Samaras, the leader of the New Democrats, Greece’s main opposition party, called for the formation of a transitional government that would approve the bailout plan, a shift from the party’s previous position that the bailout needed to be renegotiated.

“The new debt deal is unavoidable and must be safeguarded,” Samaras said in a statement Thursday. He called for elections to be held by the end of the year, after the current Parliament approves the package.

Later Thursday evening, after Papandreou addressed his deputies, Samaras gave a fiery speech in Parliament against the prime minister, raising questions about whether the two rivals — who were once close friends — could set aside their differences to usher the country through the crisis.

“Papandreou pretends that he didn’t understand what I told him. I called on him to resign,” Samaras told Parliament, which has been discussing Papandreou’s fate since Wednesday. “A return to normality means elections — within the next six weeks, if possible.”

But the opposition was not the only challenger to the prime minister’s authority on Thursday. Venizelos, the finance minister, also made a high-profile split with Papandreou early Thursday, saying that the referendum was the wrong path forward. A lawyer and longtime rival to Papandreou for leadership of the Socialist party, Venizelos has been at his post only since June.

“If we want to protect the country,” Greeks must implement the new bailout plans agreed last week “as soon as possible,” Venizelos said after meeting with Papandreou and French and German leaders in Cannes on the eve of the G-20 summit. “The future of individuals and political parties of this country is not what matters.”

Greek media reported earlier in the week that Papandreou did not warn his cabinet before he called late Monday for the last-ditch referendum to shore up support, and Venizelos was admitted to a hospital for stomach pains shortly after the announcement. He went straight from the hospital to France for the G-20 meeting.

If Papandreou pulls through the confidence vote Friday, it remains unclear how much clout he will retain in the capital. One Socialist lawmaker called him “history,” and the mood within Athens remained deeply set against him even as local opinion polls continued to show a solid majority in favor of staying on the euro.

“It’s time for him to go,” said Stavros Laos, 41, an antiques dealer in the Monastiraki neighborhood of central Athens. “Papandreou is going to give us the choice now? After two years of bailout? It’s not a choice. The choice was at the beginning.”

Staff writer Howard Schneider in Cannes contributed to this report.