Political Turmoil In Greece Reaches A Climax

The political turmoil in Greece reaches a climax on Friday when Prime Minister George Papandreou faces a confidence vote in parliament that could bring down his government. On Thursday, the main opposition party rejected the idea of joining the government to help steer Greece through the austerity plan included in the E.U. bailout. Instead, they demanded new elections. Guy Raz talks to NPR's Sylvia Poggioli, who is in Athens.

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GUY RAZ: And I'm Guy Raz. Around midnight tonight, Athens time, Greek lawmakers will hand down their verdict on Prime Minister George Papandreou. They're due to vote on a confidence motion that could determine whether Greece gets a vital bailout and partial debt write-off.

The vote comes after Papandreou's surprise announcement of a referendum on that bailout, shocking Greece's EU partners and global financial markets. Though the prime minister has now withdrawn the referendum plan, it provoked mutiny in his socialist party, leading the result of tonight's vote anyone's guess.

NPR's Sylvia Poggioli joins us now on the line from Athens. And Sylvia, what are the chances that Papandreou can actually survive tonight's vote?

SYLVIA POGGIOLI: Well, the situation is extremely confused. We really don't know. His parliamentary majority has dwindled in recent weeks. It's believed now to be not more than one or, at most, two votes. Many of his own MPs are in open rebellion, calling for his immediate resignation and demanding the creation of a broad-based unity government to approve the bailout in parliament and prepare for snap elections.

It was a tumultuous day yesterday. Papandreou did indicate he could resign and begin negotiations for a coalition government with the opposition, but only after winning a vote of confidence. And this motion comes, really, after this dramatic week, but you know, he proposed the referendum and he had to take it back when EU leaders threatened to withhold the promised funds for weeks.

He's lost an enormous amount of credibility and it's not clear whether there is a sufficient number of deputies of his own party who will accept his pledge to resign and vote in his favor.

RAZ: Unity or a transitional government, though, would imply the support of the opposition. Until now, that opposition, the conservative new democracy party, has essentially rejected all of the terms of the bailout deal. So what's changed?

POGGIOLI: Well, the new democracy leader, Antonis Samaras, from the start, opposed all these radical austerity measures, saying that they have led to recession and he accused Papandreou of leading the country to ruin. But yesterday, you know, perhaps sensing that the country really could be on the brink of an uncontrolled default, Samaras changed his mind and said he would vote in favor of the bailout deal in parliament.

That's exactly what Greece's EU partners had been hoping for, a broad parliamentary consensus for this deal, which has not yet been formally approved by parliament.

In Greece, contrary to the bailouts given to Ireland and Portugal, only the Papandreou government signed a deal, not the opposition, so should the government fall without Samaras and his parties backing the bailout, the deal itself will be endangered. That's causing great concern and fears of instability at home and abroad.

RAZ: Sylvia, while the focus in (unintelligible) all this week, of course, has been on Greece, financial markets are now pretty worried about Italy. It's, of course, the third largest economy in Europe. It has a massive debt, $2.7 trillion. Is the government in Rome also on the brink of collapse?

POGGIOLI: Yes. Prime Minister Silvio Berlusconi really is in 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, you know, relaunch this country's stagnant economy.

And in a humbling move for the leader of one of the world's eight biggest economies, Berlusconi had to agree to IMF monitoring every four months of Italy's reform efforts. Italian media are describing this as a loss of national sovereignty and when Berlusconi returned to Rome, like Papandreou, he found a rebellion within his ranks. Some of his deputies called on him to resign and some have left his party altogether.

But he is the wealthiest and most powerful man in Italy and he has a strong patronage power and he's likely to spend the next few days wooing errant deputies back to his party. He faces a confidence vote in parliament in about two weeks, but most analysts believe his resignation now is a question of when, not if.

RAZ: Two absolutely extraordinary stories. That's NPR's Sylvia Poggioli in Athens. Sylvia, thanks.

POGGIOLI: Thank you, Guy.

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