PM prepares for next big vote

Buoyed by a vote of confidence in Parliament early on Wednesday that saw all 155 Socialist MPs rally behind the government, Prime Minister George Papandreou said his administration has what it takes to save the debt-ridden country but that much more must be done as a crucial vote on new austerity measures looms.

Addressing his new Cabinet, Papandreou described the confidence vote, which passed with 155 votes to 143 and two abstentions, as a ?reaffirmation of our mandate to continue with a difficult national effort.?

He called on his ministers to continue ?a tough battle on the domestic front to put our house in order and at the European Union level to secure funding for our country and make our debt manageable.?

Papandreou, who travels to Brussels on Thursday for a European Union summit where Greece?s debt crisis will be high on the agenda, on Wednesday charged Finance Minister Evangelos Venizelos with handling talks with the country?s international creditors on changes to the government?s midterm fiscal program which foresees fresh tax hikes and public spending cuts.

Late on Wednesday, sources said that officials representing Greece?s creditors – the European Union, European Central Bank and International Monetary Fund – had expressed doubts about the viability of measures designed to save 3.8 billion euros out of the total 6.4-billion-euro target for this year.

The creditors reportedly proposed the creation of more measures to cover this gap. They are also expected to propose the addition of provisions that Venizelos?s predecessor, George Papaconstantinou, had withdrawn following protests by some MPs.

These include reducing the tax-free threshold for annual income, which is currently 12,000 euros; introducing a levy on property tax – to be calculated based on size and charged through utility bills; and increasing the tax on heating oil.

The talks between Venizelos and top officials of the EU, ECB and IMF are to start today ahead of Tuesday?s vote on the midterm program. The creditors have said the program must be approved before the release of a 12-billion-euro tranche of rescue funding.

The midterm program, opposed by all other parties, has been slammed by some PASOK MPs, though only one, Alexandros Athanasiadis, who reitered on Wednesday that he will vote against it.

This would reduce the government?s majority to four seats.

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