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Greek Prime Minister Survives Confidence Vote


From NPR News, this is ALL THINGS CONSIDERED. I'm Guy Raz.


And I'm Robert Siegel. Late tonight in Athens, Greek lawmakers handed down their verdict on Prime Minister George Papandreou. His government survived a confidence vote. Hanging in the balance of tonight's political drama is whether Greece gets a vital bailout and partial debt write-off.

SIEGEL: The vote came after Papandreou's surprise announcement of a referendum on that bailout, that shocked Greece's EU partners and global financial markets. Though the prime minister later withdrew the referendum plan, it provoked mutiny within his Socialist Party

NPR's Sylvia Poggioli joins on the line from Athens. And Sylvia, how is that Prime Minister Papandreou survived tonight's vote?

SYLVIA POGGIOLI, BYLINE: Well, primarily because he promised ahead of time that he will no go to the chief of state and ask him to start negotiations for a broad coalition government. This is exactly what his own lawmakers were asking him. There were many demands from his party for him to resign. There was huge anger of the whole referendum debacle.

This evening Papandreou defended himself and his government forcefully against all criticism from within his party and from the opposition, saying that he had picked up the dirty laundry left by the opposition party from past decades. But he said the bailout deal is so important that it requires a broad consensus, so he put tonight's vote in these terms: it's not a vote for me, but a mandate to create a national unity government. He said his main interest is to stabilize the country's economy and he's open to negotiation as to who would lead the next government.

SIEGEL: So then what's actually next for Papandreou, to try to negotiate this?

POGGIOLI: Well, he didn't say exactly what he's going to do, that he'll resign, but that is what most people expect to happen in the next few days. There are reports he wants to hand over the baton to his finance minister, Evangelos Venizelos. Venizelos also addressed parliament and said the coalition government should last at least three months to secure the next installment of the first bailout, approve the second bailout, and begin implementing the terms of this deal. But the opposition leader of the New Democracy Party, Antonis Samaras, said this evening he ruled out participation in a coalition government and he wants snap elections.

After repeatedly rejecting the bailout terms, Samaras did a turnaround yesterday, perhaps sensing that the country really could be on the brink of an uncontrolled default, and he changed his mind, and he said he vote in favor of the bailout deal in parliament. And that's precisely what Greece's EU partners have partners have been hoping for, a broad parliamentary consensus for the tough terms of the deal which had not yet been formerly approved by parliament.

In Greece, contrary to the bailouts that were given to Ireland and Portugal, only the Papandreou government signed the deal, not the opposition. So had this government fallen without Samaras and his party backing the bailout, the deal itself would've been endangered. And that was causing great concern and fears of instability at home and abroad. In any case, Samaras (unintelligible) is waiting for Papandreou to announce his resignation before he agrees to do anything.

SIEGEL: Sylvia, the focus throughout the eurozone this week has been on Greece, where the debt crisis is most acute, but the financial markets are also worried about Italy, which is a much larger economy. It's the third largest economy in the eurozone. It has a massive $2.7 trillion debt. Is the government in Rome also on the brink of – well, as close to collapse as Papandreou came?

POGGIOLI: Well, yes. Prime Minister Silvio Berlusconi is in real trouble. First of all, he has lost whatever international credibility he may ever have had. At the G-20 Summit in Cannes, he failed to convince his EU partners that Italy can rapidly implement austerity measures and structural reforms that are needed to relaunch the country's very stagnant economy.

In a humbling move for one of the world's eight biggest economies, Berlusconi had to agree to IMF monitoring every three months of Italy's reform efforts. Italian media are already describing this as a loss of national sovereignty. And when Berlusconi returned to Rome, like Papandreou, he found a rebellion within his ranks. Most analysts believe his resignation now is a question of when, not if.

SIEGEL: OK. Thank you, Sylvia.

POGGIOLI: Thank you, Robert.

SIEGEL: That's NPR's Sylvia Poggioli in Athens. Transcript provided by NPR, Copyright NPR.