New Greek PM expected to win confidence vote

[November 16, 2011]  ATHENS, Greece (AP) -- Greece was negotiating with international bankers Wednesday over the details of a euro100 billion ($135 billion) writedown of its debt, as the country's new prime minister geared up to win a confidence vote on his coalition government.

Interim Prime Minister Lucas Papademos, a former central banker appointed after laborious power-sharing negotiations last week, is expected to easily win the vote in parliament. His government is backed by Greece's two main parties -- the majority Socialists and the conservatives -- and a small right-wing party, and is tasked with keeping the nation out of bankruptcy.

After the vote, Papademos will meet with Charles Dallara of the International Institute of Finance, a global bank lobbying group. Dallara will also hold talks with Finance Minister Evangelos Venizelos, and Greek officials will negotiate over the phone with bankers in Paris and Frankfurt on the debt relief deal struck last month in Brussels.

"I come in a hopeful frame of mind, hoping we can move to implement the decisions taken in Brussels," Dallara told The Associated Press. "I think we can all be hopeful with the new government in Athens."

Greece is at the heart of a vicious debt crisis that has brought it to the brink of bankruptcy. In return for bailout loans, the previous Greek government had to force through a deeply resented austerity program, which has seen repeated tax hikes, and cuts in pensions and civil service salaries.

Since May 2010, the country has survived on installments from a euro110 billion ($150 billion) rescue loan package from its European partners and the International Monetary Fund. When it became obvious that even that sum was not enough, European leaders struck a new bailout deal on Oct. 26, worth a total euro130 billion ($176 billion). In addition, it was agreed that banks and other private holders of Greek bonds would write off 50 percent of their Greek debt holdings.

But last month's political turmoil in Athens delayed the release of the latest loan installment for Greece, worth euro8 billion ($11 billion), without which Greece will go bankrupt before Christmas.

The country's creditors insist the money can only be released after Greece formally accepts the new bailout and rival party leaders sign commitments to honor it -- a demand that conservative leader Antonis Samaras has rejected.

The Ta Nea newspaper highlighted the impasse Wednesday with the front-page headline: "(Samaras') signature is worth euro8 billion."

Samaras told parliament the three coalition partner leaders have already committed themselves in writing to back Papademos, and to seek additional pledges is excessive.

"Not only do we back the transitional government, but we played a leading role in its formation," Samaras said Wednesday, adding that Papademos has a specific mandate to implement the Oct. 26 deal.

Papademos was sworn in last week, replacing Socialist Prime Minister George Papandreou who stepped down days after floating a disastrous proposal to put the new debt agreement to a referendum.

While polls show popular support for Papademos' new administration, which will govern until elections in February, Greeks remain deeply angered by 20 months of belt-tightening that have triggered a wave of general strikes and often violent protests.

On Wednesday, public electricity workers turned off the power to the country's health ministry building in Athens for four hours to protest unpaid state bills to the utility.

Their union said the ministry owes the Public Power Corporation, or PPC, euro3.8 million ($5.1 million). out of a total euro141 million ($191 million) state debt to PPC.

The PPC union is protesting a new property tax that is being levied through household electricity bills -- with people who don't pay facing the prospect of having their power supply cut.

[Associated Press; By NICHOLAS PAPHITIS]

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