Prime Minister George Papandreou and his government face a confidence vote in Parliament tonight that could decide whether Greece will head for early elections or if talks regarding the formation of an interim administration will begin.
Papandreou needs to garner 151 out of 300 points in Parliament to remain in power but his government only has a two-seat majority.
The prime minister indicated late on Thursday that he would be willing to step aside and allow an emergency government to be formed but insisted that he wanted his MPs to publicly show their support for him first.
There are serious doubts that Papandreou will get the support he is looking for. Several MPs have indicated that they would not support the prime minister unless they are sure he is serious about putting into motion talks with the opposition.
Reuters quotes unnamed government sources on Thursday night saying that ministers had ensured Papandreou that they would deliver a ‘yes’ vote tonight to ensure that Papandreou could step down with some dignity.
Meanwhile, New Democracy has indicated that it could pull out of talks on a caretaker government if Papandreou receives the backing of PASOK deputies tonight. If Papandreou fails to win the confidence vote, then Greece would probably head for elections. The constitution gives the defeated party a small window of opportunity to attempt to enter negotiations to form a coalition government. If it fails, the opposition parties have the same opportunity. However, it is likely that snap elections will be called instead.
The conservatives fear that a positive vote could lead to Papandreou clinging on to power rather than seriously engaging in talks with ND about forming a short-term administration that would secure the next loan tranche Greece is due to receive from the eurozone and the International Monetary Fund.
The conservatives would also like the interim government to negotiate the terms of the next bailout package. The eurozone agreed a deal last week for 100 billion euros of debt to be removed from Greece?s shoulders through a 50 percent haircut for private bondholders.
Greece?s partners also agreed to provide another 130 billion euros in loans. However, the exact measures that Athens will have to adopt in return are not known.
New Democracy appears to support the idea of the interim government being staffed by technocrats rather than politicians. The conservatives want the government to serve for only a few months so it can negotiate the agreements with the eurozone and the IMF and then call elections.