September 23, 2020

Worried Eyes on Greece Ahead of Confidence

A day after calling off a highly contentious plan for a referendum on Greece’s latest debt deal that had jolted markets and shaken Europe, Mr. Papandreou was under intense pressure from his own Socialist party and the center-right opposition to step aside if his government survived the confidence vote, to pave the way for a unity government or early elections. His position on stepping down had appeared to waver throughout the day Thursday, infuriating the leader of the opposition New Democracy Party, whose hard-won support for the debt deal was crucial to averting the referendum.

Even if the socialists win the vote, Mr. Papandreou is under so much pressure from within his own party that he would most likely have to step aside and make way for a new leader — or for a coalition government with the center-right opposition.

They have refused to consider such an option unless Mr. Papandreou resigns.

The political instability comes at a crucial time. The Greek Parliament must still approve the new debt deal with Europe, which was hammered out in Brussels on Oct. 26 as part of a broader deal to shore up the euro. If not, it might jeopardize not receive the next installment of foreign aid, money it needs to meet basic expenses and prevent a default whose worst-case outcome would have banks beginning to topple throughout Europe and other sovereign governments.

The confidence voted is expected after midnight, in the early hours of Saturday local Greece time. To survive, Mr. Papandreou needs to win a majority of those present. There are 300 seats in Parliament, of which he normally commands slightly more than half. But with his own party in disarray, he cannot count on the usual number. On the other hand, if some lawmakers stay away, the number of votes that would constitute a majority drops.

On Friday, Mr. Papandreou was trying to solidify his support among dissenters in his own Socialist party, many of whose members believe he lost credibility with the referendum plan.

When Mr. Papandreou called off the plan, he cited the center-right New Democracy party’s shift on the debt deal and called for greater consensus to push through the debt deal and the new austerity measures it requires.

But the two parties’ definitions of consensus diverged.

In a climate of intense political maneuvering ahead of the vote on Friday, New Democracy held fast to its refusal to enter talks for a coalition government as long as Mr. Papandreou remained prime minister. Instead, it seeks a transitional government led by technocrats ahead of early elections.

The pressures on Mr. Papandreou from within his party were high.

On Friday, his finance minister, Evangelos Venizelos — seen as a political rival as much as an ally — spoke on the telephone with some of the key players behind the debt deal, which calls for private banks to take a 50 percent writedown on the face value of some of their Greek debt. Among them were the chairman of the euro zone finance group, Jean-Claude Juncker; the European Economic and Monetary Affairs Commissioner Olli Rehn and German Finance Minister Wolfgang Schaueble. Mr. Venizelos reassured them that the Greek government would be able to unite behind the debt deal after the confidence vote.

Mr. Venizelos told the European Union officials that the government “aimed to win the vote of confidence tonight, not to continue alone with the support only of members of Parliament from the governing Pasok party but to achieve the greatest possible consensus and cooperation for the benefit of the country and subsequently form a government reflecting this consensus,” the Finance Ministry said in a statement. Pasok is the Greek name for the Socialist party.

Aimed at reassuring markets and Europe, Mr. Venizelos’ statement was also seen as a sign of his exerting his own authority. A Socialist stalwart, he lost to Mr. Papandreou in elections for Socialist party leadership in 2007.

A more reform-minded wing of Pasok, including Health Minister Andreas Loverdos and Education Minister Anna Diamantopoulou, wrote an open letter to Mr. Papandreou earlier this month criticizing him for not carrying out structural changes fast enough.

In a statement issued on Friday, Mr. Loverdos said that he would support Mr. Papandreou in Friday’s confidence vote but that unless talks began immediately for a unity government, “I will have no involvement in the political process that follows.”

Steven Erlanger contributed reporting from Cannes, France, and Alan Cowell from London.

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