Euro Crisis in Athens Greek Prime Minister Papandreou Offers to Resign

On a day of protests and general strikes in Greece, Prime Minister George Papandreou offered to step down to pave the way for a unity government to lead the country through its current crisis. But Europe still hasn't been able to agree on a new aid package for the deeply indebted country.


The financial crisis in Greece, it would seem, has only been getting worse in recent weeks, no matter how hard the country's European Union partners try to find a solution. Now, however, Athens may also be on the verge of a political crisis.

According to Greek state television and Reuters, Prime Minister George Papandreou on Wednesday offered to resign in order to simplify the creation of a unity government. His offer came on the heels of talks with opposition leader Antonis Samaras, the goal of which was the creation of a coalition pairing Papandreou's socialists with Samaras' conservatives, according to the state-owned television station NET. "It is a historically critical moment," Papandreou said, in reference to his country's financial situation.

Samaras said the alliance was a short-term measure to lead the country through the current crisis. But, he added, such a government could not be led by Papandreou.

Papandreou's offer came on a day of massive protests on the streets in front of the Greek parliament building in Athens. Some 20,000 demonstrators were on hand to protest the extreme austerity measures imposed by the government in an effort to get the country's budget under control. Several protesters threw rocks and bottles, with the police responding with tear gas. Papandreou's car was hit by a hail of oranges as it passed.

General Strikes Amid Austerity

According to a Reuters report, demonstrators also attacked the Finance Ministry using Molotov cocktails. There were also fights between masked left-wing anarchists and right-wing extremists in the center of the Greek capital. Greek television reported that the two groups attacked each other with clubs.

Wednesday also saw a general strike in Greece resulting in the cessation of all train, ferry and bus connections. Ministries, banks and several companies remained closed for the day. Air traffic controllers did not take part in the strike so as not to unduly harm tourism.

Papandreou's austerity measures call for tax hikes and spending cuts in an effort to save €6.5 billion. The measures are intended to pave the way for the next tranche of aid due from the European Union and the International Monetary Fund. Without it, the country could become insolvent.

Nevertheless, the country will almost certainly need a second aid package, in addition to the €110 billion package it was granted in May 2010. Euro-zone finance ministers were unable to agree on the framework for such an aid package at a Tuesday meeting in Brussels. Germany, among others, would like to see the participation of private investors in any such package, but several countries -- along with the European Central Bank -- disagree.

cgh -- with wire reports


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