News / Europe

New Greek Government Wins Crucial Vote of Confidence in Parliament

Employees of the state-owned company Hellenic Defence Systems, protest outside the Greek parliament against the privatization of the company, June 21, 2011
Employees of the state-owned company Hellenic Defence Systems, protest outside the Greek parliament against the privatization of the company, June 21, 2011
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Greek Prime Minister George Papandreou survived a crucial parliamentary confidence vote early Wednesday, making passage of controversial economic reforms more likely.

As expected, the vote was strictly along party lines, with 155 lawmakers voting to back the new government and 143 voting against it.  Two abstained.

It came after a day of fierce debate, which saw several opposition members storm out of the chamber.

Thousands of Greeks massed outside parliament reacted with fury when the results were read.  Riot police used tear gas to disperse a group of protestors who broke off from the main rally.

Following the vote, Asian stock markets rose, with Tokyo's Nikkei gaining 1.8 percent.  The euro also managed short term gains.

Papandreou is appealing to lawmakers to pass his package of spending cuts, tax hikes, and the sale of state assets. Passage would assure a $17 billion installment of last year's $160 billion bailout from the European Union and International Monetary Fund.

Eurozone finance ministers have said they would approve the payment only when Greece passes more economic reforms.

Papandreou warned parliament that Greece would face bankruptcy and default next month if it fails to back his reforms and secure the loan payment.

The opposition and some members of the prime minister's own Socialist Party say the reforms will not work. And millions of ordinary Greeks have been holding strikes and nationwide protests, angry that they are being asked to make more sacrifices.

Some information for this report was provided by AFP, AP and Reuters.

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