PM under pressure, emergency meeting called [update]

Beleaguered Prime Minister George Papandreou?s plans to unveil a new Cabinet on Thursday before seeking a vote of confidence from Parliament later in the week were thrown into disarray after two PASOK deputies resigned their seats.

Meanwhile, in Brussels, the European Union’s top economic official said it was ?regrettable? that talks on Wednesday between the leaders of Greece’s two mainstream parties over forming a union coalition fell through, but expressed confidence that the debt-choked country will push with the requisite reforms and spending cuts by the end of June.

Although the resignations of Giorgos Floridis and Ektoras Nasiokas did not affect the government?s five-seat majority in Parliament, as the deputies gave up their seats, they put intense pressure on Papandreou.

There are now calls for him to go from within PASOK. In response to the rising pressure, PASOK’s headquarters issued a statement saying that Papandreou would chair an emergency session of the party’s parliamentary group at 4.30 p.m. to discuss what the government’s next steps should be. Prominent PASOK deputy and former minister Vasso Papandreou told reporters that the issue of a possible party leadership change would be among those on the agenda.

A key member of the Cabinet stressed the importance of presenting a united front. ?In these tragic circumstances, we all have to be united,? Health Minister Andreas Loverdos told Parliament.

However, the mood among PASOK MPs was not one of patience and understanding.

?The country is descending into chaos,? Piraeus deputy Dimitris Lintzeris told Skai Radio on Thursday. ?There is a deficit in terms of the country?s governance. I am calling on PASOK?s top officials to assume their responsibilities,? he said.

Sources close to the prime minister insisted that his plans for a Cabinet reshuffle would not be affected by Thursday?s resignations.

Coalition talks

Following a day of speculation, Papandreou announced in a televised address late on Wednesday that he would reshuffle his Cabinet. He admitted that he had discussed the possibility of forming a coalition government with New Democracy.

The deal may have involved Papandreou stepping down but the premier said he pulled the offer off the table when the opposition party leaked details of the story.

New Democracy leader Antonis Samaras responded by blaming Papandreou for the talks collapsing. The ND leader demanded snap elections.

According to sources, the two leaders spoke three times on Wednesday. In the first phone call, Papandreou proposed forming a government of national unity. Samaras reportedly asked for a change of Cabinet and prime minister.

In the second call, Samaras added the demand that a date should be set for general elections. The third time the men spoke, Papandreou informed Samaras that he could not agree to his demands.

EU reaction

In Brussels, Monetary Affairs Commissioner Olli Rehn on Thursday said it was ?regrettable that the efforts to build national unity [in Greece] failed yesterday.?

But he said he expected the parliament to pass new austerity measures.

?We expect the Greek Parliament to endorse the economic reform program as agreed by the end of June,? Rehn said.

?The efforts needed to avoid a default — which would be a catastrophe for Greece — are the responsibility of all political forces.?

In Athens, Greece’s president on Thursday urged the country’s politicians to show responsibility.

“In this crucial period we must all be responsible to make sure we do not allow the economic crisis to turn into a political one,» President Karolos Papoulias said in a written statement.

Sources told Kathimerini that Papandreou plans to form a Cabinet of 15 ministers that will probably include two or three non-political figures. Former European Central Bank vice president Lucas Papademos is one of those linked with a position in the new Cabinet.

Having announced a new Cabinet, Papandreou is then likely to seek on Sunday a vote of confidence from Parliament. Effectively, this means that he will be seeking the support of his own MPs as a mandate to continue with the austerity measures set out in the government?s medium term fiscal plan.

PASOK has 155 of the 300 seats in Parliament, having seen five of its MPs leave the party to sit as independents or form their own political grouping since it came to power in November 2009.

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