August 16, 2022

Greek Leader Reshuffles Cabinet, Asks for Vote

Earlier in the day, as thousands took to the streets to protest austerity measures, Mr. Papandreou had offered to step aside so that his Socialist party could form a coalition government with the center-right opposition, but only if it would support a new bailout plan for the debt-ridden country. Greece needs to pass a new round of austerity measures by the end of the month in return for fresh loans from the International Monetary Fund and the European Union.

 News of the political instability here rattled world financial markets, which fear that Greece’s failure to agree on an austerity package could lead to a default that could ignite a series of crises in other heavily indebted euro zone countries, like Portugal, Ireland and Spain. That, in turn, could threaten Europe’s banks.

Greece instituted a round of painful budget cuts last year in exchange for international financial assistance that staved off default. With the country now seeking a new round of financing, Greek leaders face the nearly impossible task of balancing the demands of their hard-pressed citizens with those of the I.M.F. and the European Union.

Mr. Papandreou’s support is plummeting, even within his party, and the Socialists in turn appear to be lagging behind the center-right opposition for the first time since the current government was elected in 2009. With a five-seat majority in Parliament, Mr. Papandreou has been struggling to get his government fully behind the measures amid growing rifts within his party.

Antonis Samaras, the leader of the center-right New Democracy party, has opposed spending cuts, calling instead for tax breaks and a renegotiation of the terms of Greece’s agreement with its foreign creditors.

After hours of speculation, Mr. Papandreou went on national television just before 10 p.m. local time and announced the cabinet reshuffle. He criticized the opposition for playing politics with the country’s future.

“I have asked for this effort to be a common one, I made constant appeals for consensus to the opposition,” he said. “Today, I repeated those appeals,” he said.

The prime minister also accused the opposition of leaking details of a highly sensitive preliminary conversation to the news media. Before the two leaders could discuss possible terms, he said, “Certain conditions were made public, which would not be acceptable because they would keep the country in a prolonged state of instability and introversion.”

Mr. Samaras defended his actions in a televised speech later on Wednesday, saying it was impossible to participate with the Socialists in a coalition government because “they have lost the trust of both the Greek citizens and the markets.” Speaking of Mr. Papandreou, he said, “If he can govern, he shouldn’t have asked us for support. If he can’t, he should call elections.”

On Wednesday, thousands joined a nationwide strike as Parliament prepared to debate a second round of sharp cuts to government spending. The measures are highly unpopular with Greeks, who have already suffered deep salary and pension cuts.

“We had the first set of measures, that’s over, now they want a second,” said Angeliki Kolandretsou, 63, a retired private nurse who was one of thousands of Greeks who joined the nationwide strike Wednesday. “But what will we see from this? Nothing at all. It will just go to the banks.”

On Wednesday, the police fired tear gas and scuffled with protesters in the central Syntagma Square here. Some in the crowd smashed the windows of a luxury hotel and tried to prevent legislators from entering Parliament. Police officials said they had detained more than 20 people.

Violent and often theatrical protests have long been a mainstay in Greece, even before the financial crisis hit. But in a more telling sign of the depth of the anger, for three weeks, peaceful demonstrators have gathered daily in Syntagma Square, some sleeping in tents, to protest the austerity measures.

Wednesday’s protest drew 25,000 largely peaceful demonstrators from across Greek society.

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