Finance Minister May Take Over Papandreou Wins Confidence Vote, Seeks Unity Government 

Hours after winning a confidence vote in parliament, Greek Prime Minister George Papandreou called for the formation of a "government of national unity" to secure continued EU aid and save Greece from bankruptcy. Sources said he may step down and be succeeded by Finance Minister Evangelos Venizelos.


Greek Prime Minister George Papandreou said on Saturday that talks would start soon to form a new Greek government supported by several parties, hours after he survived a confidence vote in parliament. He may step down soon and Greece may hold an election in February, political sources in Athens were reported as saying.

Speaking ahead of a meeting with Greek President Karolos Papoulias, Papandreou said he wanted to avoid early elections and said a broadly based government was needed to ensure that Greece receives the new €130 billion ($180 billion) bailout package, which includes a 50-percent debt haircut from private creditors, agreed by European Union leaders on Oct. 27.

"My aim is to immediately create a government of cooperation," Papandreou told the president in the presence of reporters. "A lack of consensus would worry our European partners over our country's will to stay in the euro zone."

The aim is to persuade international lenders to resume aid payments before the country runs out of money in December. Papandreou plunged the euro zone's rescue efforts and his own government into turmoil with his surprise decision last week to call a referendum on the bailout. He scrapped the referendum plan following massive pressure from EU leaders, especially German Chancellor Angela Merkel and French President Nicolas Sarkozy, who threatened to cease aid to Greece and spoke for the first time of the possibility that Greece may quit the euro zone.

Venizelos May Replace Papandreou

According to Reuters, political sources in Athens said negotiations on the formation of a new government are being led behind the scenes by Finance Minister Evangelos Venizelos, who aims to head the new coalition. The sources said Papandreou, leader of the socialist PASOK party, would step aside to make way for Venizelos.

Venizelos reportedly has won the backing of leaders of some smaller parties to support the coalition. The leaders of the far-right LAOS party and another center-right party indicated after Papandreou's speech that they would cooperate in a new coalition.

In parliament, Venizelos said a new government should rule until next February and then call elections. A new Greek coalition is likely to exclude the main opposition party, the conservative New Democracy, which regards an early election as the only way to solve the crisis..

Papandreou survived the vote of confidence with a slim majority of 153 votes to 145 after midnight on Saturday morning. He said he was ready to step down. "The last thing I care about is my post. I don't care even if I am not re-elected. The time has come to make a new effort ... I never thought of politics as a profession," he told parliament before the vote.

German Lawmaker Wants Greek Collateral

In Berlin, Hans Michelbach, a member of parliament for the Christian Social Union, the Bavarian sister party to Chancellor Angela Merkel's Christian Democrats, said the payout of further aid to Greece should be attached to additional conditions in response to the political uncertainty last week.

German news agency DPA reported that Michelbach said Greece may still have to leave the euro zone. "Confidence in the reliability of Athens has finally reached zero following the days of wrangling over a referendum on the measures to restructure the state finances," said Michelbach, a senior member of the finance committee of the Bundestag, Germany's parliament.

He added that even if the Greek government and parliament now promised to meet the conditions for further aid, any payout should be attached to new guarantees in the form of stakes in Greek state-owned companies.

He said the lack so far of "any initiative to privatize state companies" by Greece raised doubts about the nation's commitment to restoring its finances to health.

cro -- with wire reports


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