Greek Prime Minister George Papandreou survived a vote of confidence in parliament on Friday evening, while indicating that he might be prepared to stand down. Results showed there were 153 votes in favor of Papandreou, with 145 against.
Intense European pressure forced debt-stricken Greece to seek political consensus on a new bailout plan instead of holding a referendum after EU leaders raised the prospect of a Greek exit from the Euro to preserve the single currency.
If Greece decided to leave the Euro, it would also have to quit the European Union, according to the terms of the EU treaties, the European Commission said on Thursday.
Greece will receive no more European bailout aid until it has put an end to uncertainty and agreed to meet its commitments to the Euro zone, the leaders of France and Germany said on Wednesday.
Germany and France told Greece on Wednesday it should make up its mind by mid-December whether it wants to stay in the Euro zone when Greeks vote on a 130-billion-Euro bailout.
Germany's Angela Merkel and France's Nicolas Sarkozy are “determined” to implement the EU bailout plan for Greece. That was the outcome of an emergency phone call between the two chiefs of state ahead of a G20 summit Wednesday.
Germany will do all it can to rebuild confidence in debt-stricken Greece as it implements reforms to meet the conditions of its international bailout package, Chancellor Angela Merkel said on Tuesday.
International lenders told Greece it must shrink its public sector and improve tax collection to avoid default within weeks as investors spooked by political setbacks in Europe dumped risky Euro zone assets.
Greece’s ability to avoid default hangs in the balance this week as international monitors get set to assess whether Prime Minister George Papandreou can meet the conditions of rescue loans.
European Union finance ministers pledged to beef up a rescue package for troubled economies such as Greece as they went to battle to contain debt crisis contagion threatening to engulf Silvio Berlusconi’s Italy and Socialist Spain.