Greek PM survives confidence vote, looks to transitional government

“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,” he said.

Rebellious MPs and ministers from the ruling Pasok party, including finance minister Evangelos Venizelos, had publicly yanked their support earlier in the week after Papandreou announced a referendum on the new, €130 billion EU-IMF bail-out deal and accompanying austerity measures.

Horrified that if allowed to vote, people would reject the delicate plan, European leaders piled pressure on the prime minister to pull the referendum or turn it into a straight in-out plebiscite on membership of the euro, in effect a vote on continued membership of the European Union.

The resulting furor provoked cabinet colleagues and a number of MPs to call on the prime minister to step down and make way for a transitional government.

Papandreou acceded to the demand, saying the referendum call was only ever a ruse to flush out support for the EU-IMF deal from the right-wing opposition New Democracy party.

The conservatives have consistently opposed the details of EU rescue operations, but, according to most commentators, not out of principled disagreement with the policies. The party in fact agrees with spending cuts and structural adjustment, but has attacked the two deals in order to pile political responsibility for the widely reviled austerity measures on the government.

The socialist prime minister appears to have succeeded in winkling out public support for the new deal, but whether he will be able to cobble together a unity government remains an open question.

Papandreou is to meet with President Karolos Papoulias at noon (11am CET) to discuss formation of a coalition government.

But Pasok and New Democracy remain far apart over the construction and schedule of the replacement administration.

Papandreou is offering a Pasok-led government under the direction of respected politicians who will be able push through a vote on the new EU-IMF deal and austerity measures but would continue to manage the country through to the spring, whereupon early elections would be held.

New Democracy for its part is demanding a unity government of technocrats instead and snap elections within six weeks.

The figure of Lucas Papademos, Greece’s representative on the European Central Bank and a firm supporter of deeper austerity measures, is prominent amongst a list of individuals that could lead the new government.

Some middle-class Greeks appear willing to accept this option, believing Papademos to be above politics and incorruptible due to his personal wealth, but this opinion is far from widespread.

On the streets, ahead of the vote on Friday night, ordinary Greek citizens once again demonstrated in their thousands, protests that were expected to be repeated by public-sector unions on Saturday.

Vassilis, an aerospace worker who did not want his last name to be published due to work concerns, said that a defeat for Papandreou would have at least sated the anger of the people, as the prime minister is a lightening rod for popular fury. Demonstrators regularly denounce him as a “traitor” in their chants.

“People will relax a little bit for a few days,” he told EUobserver.

“But a victory for Papandreou in the confidence vote will make people even angrier.”