Government focuses on midterm deal

After winning a confidence vote 155 to 143 along party lines in Greece’s 300-seat Parliament late on Tuesday, the government of George Papandreou is now set to approve a new austerity package that is crucial to staving off a Greek default.

The positive outcome of the vote in Parliament paves the way for the Socialist PASOK government to implement reforms aimed at bringing in 28 billion euros in budget cuts and new taxes as well as 50 billion euros from a string of privatizations of public assets. These measures are the cornerstone of a five-year midterm fiscal deal with Greece’s creditors the European Union, the European Central Bank and the International Monetary Fund (IMF) that will inject the impoverished country with an additional 12 billion euros of bailout money on top of the 110-billion-euro rescue package granted by the creditors last year.

«Regardless of the panic caused by some, we are on an organized course, helped by the international community with massive loans — the largest ever given in the history of our planet,» Papandreou told Parliament ahead of the confidence vote on Tuesday, underlining the magnitude of Greece’s responsibility toward its creditors.

Speaking on Skai Television on Tuesday, government spokesman Ilias Mosialos warned that unless the rescue deal passes in Parliament, where it is due to be voted on next week, Greece will run out of money by mid-July and will be unable to pay public sector wages wages and pensions.

With the confidence vote secured, Papandreou was to chair a meeting with his newly reshuffled Cabinet on Wednesday to discuss the terms of the midterm bailout plan.

«We have to pass two laws by June 30 so that procedures at the Europgroup will move on July 3, enabling the IMF to decide to release the fifth loan instalment on July 8,» newly appointed Finance Minister Evangelos Venizelos told lawmakers on Tuesday prior to the confidence vote.

Venizelos is currently in talks with officials from the EU and the IMF in Athens to hammer out the terms of the deal before it is debated in Parliament on Monday and Tuesday.

The next few days in Parliament promise to be stormy following an argument that broke out ahead of the confidence vote on Tuesday between opposition New Democracy MPs and Deputy Prime Minister Theodoros Pangalos over a comment made by the latter that the election of PASOK’s first government in 1981 «was the first unhindered and indisputable expression of public will.»

His comment prompted the ire of New Democracy’s MPs, who walked out of the House for 15 minutes in demand that the Deputy PM retract his statement. In an effort to cool tempers and bring the session back to order, Parliament speaker Filippos Petsalnikos said «this historical reference was a big mistake at a time when the country needs to be discussing the future.»

Papandreou followed by asking the New Democracy MPs not to depart, adding: «Don’t give cause that you are ready to clash with us at every opportunity and project this impression abroad.»