Greece's 'Papandreou' Cabinet Survives Confidence Vote

Greek Prime Minister George Papandreou told parliament that is light at the end of the tunnel. Photo by EPA/BGNES

The Greek cabinet has survived a critical confidence vote in its attempt to secure support for additional austerity measures and avoid bankruptcy of the State.

Prime Minister George Papandreou's new cabinet was approved by 155 votes to 143, with two abstentions. Despite the threat of a rebellion within Papandreou's ruling Panhellenic Socialist Movement (PASOK), the vote was strictly along party lines.

The confidence vote took place early Wednesday after heated debates on Tuesday when several opposition representatives briefly walked out on several occasions.

"At this time of pain I want to send a message to all Greeks. Yes, the course is difficult but there is light at the end of the tunnel. We all have to agree that we will put an end to deficits. We want to make a leaner, healthier state, because otherwise our country cannot take the burden," the PM is quoted saying.

His words were dismissed by some opposition MPs during the debate, pointing out the austerity measures were not "a program to salvage the economy, but a program for pillage before bankruptcy."

The Members of the Parliament will have to approve EUR 28 B in cuts, tax hikes, fiscal reforms and privatization plans – all needed so that Greece can obtain an EU loan to help pay its debts.

On Sunday, the Euro Zone ministers said they would withhold the payment of the latest tranche of the European Union and International Monetary Fund's EUR 110 B bailout package until the measures become implemented. They also agreed to put together a second bailout package worth EUR 120 B euros to fund Greece into late 2014.

The new bailout package, to be outlined by early July, will include loans from other Euro Zone countries. It will also feature a voluntary contribution from private investors, who will be invited to buy up new Greek bonds as old ones mature.

Greece needs the loan to be able to keep up with payments to creditors of its EUR 340 B of debts, which amounts to EUR 30 000 per person.

BBC reports that thousands of people rallied outside the parliament building during the confidence in Athens to protest against both austerity measures and crooked politicians, chanting: "Thieves! Thieves!"

Papandreou recently reshuffled his cabinet and last week replaced his finance minister after weeks of demonstrations against his handling of the crisis.

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