George Papandreou, Greece's American-born prime minister, faces a make-or-break week in which he seeks to steer a draconian austerity bill through Parliament in the face of a national strike and mass protests.
Success for Mr. Papandreou will earn Greece a fresh international bailout. Failure could leave Greece headed for bankruptcy within weeks and trigger financial turmoil with incalculable consequences for the euro currency area.
The center-left premier enters his test with a stronger position than two weeks ago, when his government nearly fell apart amid mounting national despair. His ruling Socialist party has rallied around him since he reshuffled his cabinet and reasserted his determination to close Greece's budget shortfall, despite rising anger on the streets.
At issue in parliamentary votes on Wednesday and Thursday are €28 billion ($40 billion) in spending cuts and tax increases, on top of existing austerity policies, which Greece has promised the European Union and the International Monetary Fund in return for greatly expanded financial aid.
Victory for the government would at least avert a Greek default in the short term—although it wouldn't cure the underlying problem of Greece's crushing debt burden, which could take years to resolve.
"As long as we continue to implement these reforms...I believe we will succeed," Mr. Papandreou said Friday. "And I believe the majority in the Greek parliament understands that." Many analysts agree the odds favor the premier, although a risk remains that his party's slim majority in parliament could crumble.
Two weeks ago, "everybody was expecting the end of Papandreou. Now he is back at the helm, and he has an opportunity to recover further if he shows decisiveness," said Yannis Stournaras, director of the Foundation for Economic and Industrial Research, an Athens think tank.
Yet critics say decisiveness doesn't always come easily to Mr. Papandreou, the 59-year-old scion of Greece's version of the Kennedy clan.
Source:(Wall Street Journal)
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