Greece: prime minister George Papandreou offers to stand aside

PM invites opposite number, Antonis Samaras, to join his party in a national unity government to address tailspinning economy The economic and social mayhem gripping Europe’s peripheries appeared to have claimed the scalp of another government after the Greek prime minister admitted he could not drive through reforms to shore up the beleaguered economy, and offered to make way for a government of national unity. After a day on which tens of thousands marched on parliament to oppose the swingeing austerity measures designed to stave off bankruptcy, George Papandreou effectively conceded that he had not been able to muster enough support in parliament for the swingeing cuts required by international creditors to enable Greece to balance its books. Papandreou told his conservative opposite number, Antonis Samaras, that he would stand aside and make way for a new leader if the opposition joined his party in a national unity government committed to sweeping reform to prevent Greece’s tailspinning economy from crashing. It remained unclear whether the opposition New Democracy party would agree to the move. Party insiders were indicating that it would only do so if the government renegotiated the terms of last year’s €110bn (£96bn) international bailout package, designed to save Greece from default. “The most important member of a ship’s crew is the captain, and the captain has to go,” prominent conservative deputy Theodoros Karaoglou said, according to Associated Press. “If we joined forces, we could go to our (creditors) together to negotiate and the results of course would be better.” Greece’s economy is drowning in more than 300bn euros of debt – around one and a half times bigger than the country’s entire annual output. Unemployment has rocketed to 16.2 percent, and the economy is predicted to contract by as much as 3 percent this year, making it Europe’s worst performing economy – and one of the worst in the world. Under a bailout agreed with the EU and IMF a year ago, the country was to implement painful austerity measures, cutting spending deeply and privatising large swathes of the economy. Papandreou’s plan provided for 6.5 billion euros ($9.4 billion) in tax rises and spending cuts this year. But a popular revolt has demonstrated that reforms are deeply unpopular. A wave of strikes and riots have reduced Athens to a smouldering mess of shattered windows and shuttered storefronts, furious during daytime riots, derelict and desolate by night. Earlier on Wednesday, police used teargas on demonstrators rallying outside parliament. At least 11 people were injured and another 20 people were detained, according to police, as protesters responded to tear gas by hurling stones and firebombs. Cafe tables and chairs lay overturned as rubbish bins burned. Heavy clouds of teargas hung over Syntagma Square and side streets. The choking chemicals wafted as far as the presidential mansion behind parliament, where Papandreou met with the country’s president, Karolos Papoulias, to brief him on the severity of the situation. “We want them out. Obviously these measures are not going to get us out of the crisis,” said Antony Vatselas, a 28-year-old mechanical engineer, crying from tear gas. “They want only us to pay for it,” he told Reuters. “And they are doing nothing. I want the debt to be erased. If this doesn’t happen, there is no exit for Greece.” Papandreou has suffered plummeting approval ratings and an open revolt from within his own PASOK Socialist party over the new austerity bill, which is set to increase taxes and cut spending until 2015 two years beyond the current government’s mandate. Several MPs indicated that they would not support his reform plan, threatening his thin majority in parliament, where his Pasok party has 155 seats in the 300-seat chamber. The only alternative to financial austerity appears to be a default on Greece’s large stack of loans, an outcome that European leaders have been desperate to avoid for fear that the contagion effect would ripple through the international financial system. Greece Europe Helena Smith guardian.co.uk

Posted by on June 15, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.