PM wins vote, Greece still faces uncertainty

Greek Prime Minister George Papandreou survived a parliamentary confidence vote on Saturday, avoiding snap elections which would have torpedoed Greece's debt crisis bailout deal and inflamed the eurozone's economic crisis.

But the nation remained mired in political, social and economic turmoil and Papandreou signalled he would stand down, calling for a new coalition to ram the EUR 130 billion bailout deal through Parliament and avoid the nation going bankrupt.

Papandreou's socialist government won with 153 votes in the 300 member Parliament, and a rebellion by some dissidents in his PASOK party failed to materialise after he indicated that his term as Prime Minister was close to an end.

"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 ... I never thought of politics as a profession," he told Parliament before the vote.

Papandreou said the new coalition government should secure the approval of the eurozone bailout deal, the nation's last financial lifeline, which is also the eurozone's central plank to prevent economic crisis devastating the bloc's bigger economies.

The leaders of France and Germany told Papandreou earlier this week that Greece would not get one more cent of EU aid if it failed to approve the bailout, meaning that the state would run out of money in December.

Papandreou told Parliament that he would go to the Greek President on Saturday to discuss formation of a broader-based government that would secure the eurozone bailout, adding that he was willing to discuss who would head a new administration.

The meeting will take place at noon

Papandreou dismissed demands for rapid elections as championed by the opposition. "Elections at this moment not only equal disaster but could not take place in the best interest of the people," he said.

"There is one solution. To support the (EU bailout) deal with a multiparty approach, without elections, with a strong government."

International investors took fright, Greece's borrowing costs soared and Papandreou was forced to go cap in hand last year to the only bodies still willing to lend at affordable rates -- the European Union and IMF.

In return they demanded wave after wave of spending cuts, tax rises and pension cuts which provoked widespread protests on the streets on Greek cities, with bloody clashes between demonstrators and riot police in Athens.

On financial markets, analysts said Papandreou's victory had been Pyrrhic, and many ordinary Greeks said they were disenchanted with Byzantine political wrangling that was not addressing their basic shortage of jobs and cash.

Sources said Finance Minister Evangelos Venizelos has won the backing of leaders of some smaller parties to support a new coalition that he would head. The new government would call early elections in a few months after the bailout had been secured, sources close to the deal said.

The leaders of the far-right LAOS party and another centre-right party indicated after Papandreou's speech that they would cooperate in a new coalition.

In Parliament, Venizelos said a new government should rule until next February and then call elections.

Opposition leader Antonis Samaras counted his New Democracy party out of the coalition, saying Papandreou had spurned his call for a national unity government. "Mr Papandreou rejected our proposal. The only solution is elections," he said.

Papandreou provoked uproar at home and abroad on Monday when he announced a referendum on the bailout, agreed by euro zone leaders only last week.

Under heavy domestic and international pressure, he backed down on a vote which could well have rejected the deal, potentially sinking eurozone leaders' attempts to stop the debt crisis devastating economies such as Italy and Spain.

The government officially announced earlier on Friday that the referendum would not go ahead.

Greek PM faces knife-edge survival vote

reek Prime Minister George Papandreou faces a knife-edge confidence vote on today after his plan for a referendum on a bailout -- supposed to save both Greece and the euro zone from disaster -- backfired disastrously.

But even if his socialist government survives the parliamentary vote, Papandreou's days as Greek leader looked numbered after a deal with his cabinet under which, government sources said, he agreed to stand down after negotiating a coalition with the conservative opposition.

Much of Greece and many European leaders reacted with horror after Papandreou abruptly announced on Monday that he would put the EUR 130-billion (USD 180 billion) rescue plan, agreed at a euro zone summit only last week, to the Greek people.

Papandreou came out fighting, rejecting opposition demands, in public at least, that he make way for a caretaker administration with just two tasks: forcing the bailout through Parliament without a referendum and calling of snap elections.

However, analysts said Papandreou may not be around much longer to fight such battles.

Through waves of austerity policies demanded by the nation's international lenders, Papandreou has carried the parliamentary group of his PASOK party with him, despite much grumbling within the ranks.

But a steady trickle of defections has reduced his majority to the point that one or two waverers could inflict a defeat in the confidence vote, expected as late as midnight

PASOK has 152 deputies in the 300-member parliament. But lawmaker Eva Kaili said that while she would stay in the party, she would refuse to support the government in the confidence vote, meaning Papandreou could count at most on the support of 151 deputies.

Only one more defection would strip the government of its majority and probably trigger early elections.

Greeks have fought tooth and nail against policies which have brought spending cuts, tax rises and job losses, pushing the nation into three years of recession, and they have staged a series of strikes and protests, some of which turned violent.

This made a "no" vote in any referendum highly likely, even though this would cut off Greece's last international financial lifeline and risked spreading its debt crisis to much bigger euro zone economies, such as Italy and Spain.

But after a tumultuous day in Greek politics, the chances of the referendum being held dwindled to almost nothing on Thursday. Papandreou offered to drop the idea anyway if the conservative opposition backed the bailout in Parliament.

Over the day, he talked about negotiating with the conservative New Democracy party, saying the national interest ranked well above his personal ambitions. "I'm not tied to my post. I'm not interested either in being re-elected, I'm only interested in saving the country," he told Parliament.

Papandreou also called on his PASOK party to rally behind him in the confidence vote. But his public bravado appeared to mask an acceptance that his term may come to an end soon.

Government sources said Papandreou had struck a deal at a cabinet meeting on Thursday under which he would stand down after he had negotiated a coalition agreement with the conservative opposition -- provided he survives Friday's vote.

Ministers involved in striking the deal with Papandreou, led by Finance Minister Evangelos Venizelos, said he should go for the sake of their PASOK party, said the sources, who had knowledge of Thursday's meeting of the cabinet.

Papandreou admitted he had made a mistake in calling on Monday for the referendum on a bailout, the sources said.

German Chancellor Angela Merkel and French President Nicolas Sarkozy summoned Papandreou and Venizelos to Cannes on Wednesday where they made clear Greece would receive no EU aid if the nation failed to stick to the deal.