Photo: Wikimedia Commons
After generating a week of back-and-forth headlines, PM George Papandreou and his coalition will ask for a confidence vote in the Greek parliament tonight.The vote will decide the fate of the ruling coalition — and potentially the fate of the eurozone.
It’s unclear whether the legislature will uphold the government. In fact, the only thing that’s certain at this point is that Papandreou is out.
Papandreou proposed a referendum on the terms of the latest bailout Monday, amid growing unrest from Greeks over imminent escalations of austerity measures and reforms.
A saga ensued: EU leaders said it was bailout or bust, Papandreou got chewed out by Finance Minister Evangelos Venizelos, Papandreou said it was all a ploy and that he had reached an agreement with the opposition New Democracy party, and finally New Democracy leader Antonis Samaras said Papandreou was lying and would have to step down in order to get his party’s agreement.
The confidence vote will go ahead this evening starting at about 4PM EST, but ruling Socialist party (PASOK) leaders have increasingly geared the poll towards support for the government rather than for Papandreou.
If the confidence vote passes, PASOK will probably choose a new prime minister and could begin talks with New Democracy about a new government and elections down the road.
Mega TV (via Bloomberg) is reporting that Papandreou could suggest Venizelos to replace him as Prime Minister. Venizelos lost to Papandreou for control of the party in 2007.
Passage of the confidence vote would likely (there still are naysayers) ensure approval of new bailout measures proposed by the EC/ECB/IMF troika as contingent for the second bailout, and will probably occur under a new caretaker government ahead of future elections. Dispersion of the next tranche of aid from the first bailout — delayed by the referendum debate — would be sped up, and would certainly occur before Greece goes bankrupt in about six weeks.
If the confidence vote does not pass, PASOK will be forced engage in talks with New Democracy to negotiate a coalition or transitional government that could approve the new terms of the bailout. If they cannot reach an agreement, however, the government will fall and snap elections will ensue, probably in early December.
Things look a lot scarier for Europe if it does not pass. New Democracy might demand renegotiation of the bailout terms, which Europe has said it won’t stand for. Even if EU leaders do agree to renegotiate, this — as well as potential elections — could mean that Greece does not receive aid before it defaults.
So beyond Papandreou, just about everything is up in the air.