Pressing on
June 16, 2011
Greek Prime Minister George Papandreou has announced that he will form a new government on Thursday and seek a fresh vote of confidence in parliament.
"I will continue on the same course. This is the road of duty, together with PASOK's [Socialist] parliamentary group, its members, and the Greek people," Papandreou said in an address broadcast on public television on Wednesday evening.
Earlier in the day, the prime minister had offered to step down to pave the way for the creation of a government of national unity.
He reportedly put his proposal to the leader of the conservative opposition New Democracy party.
"Prime Minister Papandreou spoke to [Antonis] Samaras and proposed that if the two agreed on a framework of specific commitments for change in the country and the political system and specific targets, he would be willing to stand down from his office," a government source told the Reuters news agency.
Sources in the New Democracy party said it had been willing to enter a government with the Socialists, as long as Papandreou resigned and they committed to renegotiating the terms of an International Monetary Fund-European Union bailout.
Papandreou has been facing opposition not only from other political parties, but from among his own Socialists as well.
Violent protests
The developments came as tens of thousands of protesters were massed outside the parliament building in Athens to protest against the Socialist government's plans to impose even tougher austerity measures than have already been implemented as part of the 110-billion-euro ($158.1 billion) IMF-EU bailout.
What began as a peaceful protest eventually turned violent, with some throwing petrol bombs at the Finance Ministry. Police fired volleys of tear gas during clashes with demonstrators in Athens' Syntagma square. At least a dozen people were injured.
According to Deutsche Welle's Athens correspondent, Anthee Carassava, the majority of demonstrators were peaceful, but the trouble started when "scores of hooded youths burst into these crowds and engaged in clashes with riot police. The capital was taken hostage for hours by these hooded youths who just went on the rampage."
A national strike also disrupted many services on Wednesday, with government offices, schools and banks remaining closed. Ferry and train services did not operate, and hospitals were running with only emergency staff.
Papandreou's government is currently trying to win parliamentary approval for 28 billion euros in spending cuts and tax hikes. Greece has to implement the measures in order to qualify for the latest 12-billion-euro tranche of the bailout. If it fails to do so, Greece could be forced to default on its debt, which, analysts fear, could send shockwaves through the economies of the other 16 countries that belong to the eurozone.
On Tuesday, eurozone finance ministers failed to agree on a second bailout package aimed at averting a Greek debt default. The inconclusive meeting in Brussels and the ongoing political uncertainty in Greece caused the euro single currency to fall to its lowest level against the dollar in three weeks late Wednesday. The drop was aided by a warning from ratings agency Moody's that it may downgrade a handful of major French banks because of their exposure to Greek debt.
Eurozone finance minister are to meet again for discussions on Greece on Sunday.
Author: Chuck Penfold, Darren Mara (Reuters, AFP, dpa)
Editor: Michael Lawton