Rumours of Papandreou's resignation persisted for a few hours after his return from Cannes, where the Greek leader was summoned by EU leaders after his surprising announcement to hold a referendum on the deal to keep his country solvent, agreed at the last eurozone summit on 27 October.
Four ministers, including Finance Minister Evangelos Venizelos, rebelled against Papandreou and opposed the referendum. In Parliament, some MPs from Papandreous' centre-left PASOK party defected over the poll, leaving the prime minister with 150 MPs in the 300-seat parliament.
Despite all this criticism, it became clear that Papandreou would not resign but agreed instead to drop the proposed referendum, which infuriated EU leaders and rattled markets.
The Greek prime minister said there would be no need for such a referendum, as PASOK and the opposition New Democracy (ND) edge closer to a deal to resolve the country's political and financial crises.
The turning point appears to be the position of ND leader Andonis Samaras, who said that the deal to save Greece was "unavoidable" and needed to be supported. Previously, Samaras and his party had opposed all earlier agreements for bailout tranches.
According to sources in Athens, the 27 October EU deal could be approved by Parliament as soon as next week. But the political conditions still need to be worked out.
A number of pro-government and opposition MPs have called for a national unity government, including both PASOK and ND. But ND indicated that their condition would be that Papandreou steps down. From a Brussels perspective, Papandreou's political potential may be exhausted, but observers in Athens said his chances of political survival should not be so easily discarded.
Averting 'catastrophe'
Speaking in Parliament this evening, Papandreou said that if he had to choose between a wide political agreement in Parliament and a referendum, he would chose the agreement.
He also said that holding early elections would be a "catastrophe" in Greece under the circumstances, and by the end of the election Greece would be "a bankrupt country".
According to the Greek constitution, if the prime Minister loses the confidence vote, the president seeks a majority around the largest party or a coalition.
Speaking after Papandreou, Venizelos, the finance minister, said that the eurozone deal would need at least 180 votes in parliament. He also said that Greece would need the next €8 billion bailout tranche by 15 December.
COMMENTS
another "byzantine game" by greek politicians. what concessions did they get by blackmail of "referendum"?
Prime Minister Papandreou has called off the referendum regarding the bailout deal which was reached in Brussels.
The referendum for the deal posed a number of questions but most of all triggered reactions. Mrs Merkel and Mr Sarkozy were forced to suggest that the Greeks either take the deal (that it was reached with the consensus of the Greek government) or they leave the Euro zone.
This is not bad only for Greece but also for Europe. Only the thought of Greece getting out of Euro has raised the interests in Italian bonds more than 6%. But the change in the political approach within the Greek boarders have been even more important, because the position from the leaders of Germany and France have put in the spotlight all those who were avoiding their share of responsibilities.
The left has shown that it against Europe and in favor of Greece’s exit. This is clear and no backing from that position will be possible from now on, as it has been the case in the past.
The right wing also has been confronted with its claims that it could renegotiate the deals that have been reached and that it could bring big changes. Except the usual political talk Nea Dimokratia has only pledged to try to treat better those who are hit the most by the crisis, that is the low pensioners. But PASOK has also pleaded that repeatedly.
In PASOK also the recipients of the referendum proposal, have faced the same dilemma, and the fact that Mr Papandreou might now call off his decision to ask the electorate’s opinion, has on the one hand weakened those who could not stand the political cost to vote for the EU deal and the austerity measures that come with it, and on the other hand it has angered those who already calculate on a position within a new party that will be created before the next elections.
In any way, for now, we can wait for another time to decide on something important and wait to see if there will be early elections or Prime Minister Papandreou will continue his magic into building pressure and releasing it at the right direction.
Prediction - Greeks will take Athens etc apart - major riot - referendum reinstated - elements that do not want to hear the voice of the people booted out - Mr Pap' last man standing. What I like in all this is the way the voice of the ordinary people i.e. the non-politicos DFO NOT COUNT. One is reminded of Orwell prose in 1984 - a boot stamping on the face of the people - forever. Ok Greek - give it to em.
Today is an important day for Greece with the confidence voting. I want to express my support for the Greek Prime minister Papandreou. The current financial problems of Greece are not caused by this prime minister. Greece was the inventor of democracy a long time ago and produced big thinkers like Euclides and Aristoteles. Greece can show the world again the democratic principle that the Greek
Society is in control over Greece and not the Financial World. I hope the Greek parliament will vote for Papandreou and a referendum on issues
which are important for the Greek Country, Culture and Society, so Greece shows the world that the greek people and not the financial worls is in control of Greece.
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