Greece's new coalition government wins confidence vote

Nov 16, 2011, 17:05 GMT

Athens - Greece's new coalition government, headed by former European Central Bank member Lucas Papademos, won a confidence vote in parliament with a comfortable majority on Wednesday.

A total of 255 lawmakers in the 300-seat parliament voted in favour of the new government formed last week by the majority Socialists, main opposition conservatives and a small right-wing party. Only 38 voted against, while the remaining seven were absent.

Papademos has been given a three-month mandate to fulfil the obligations of the debt-ridden nation under a bailout programme financed by the European Union and International Monetary Fund (IMF), as well as to speed up long-term reforms.

The new prime minister will also push forward a series of austerity measures already passed, including increased taxes and the layoff of 30,000 civil servants on partial pay.

Earlier, Papademos called for unity in order for the country to remain within the eurozone, saying 'there are no magic solutions.'

Finance Minister Evangelos Venizelos said talks were underway to secure cross-party backing for the 130-billion-euro (175.6-billion-dollar) bailout package.

The debt deal includes provisions for private bondholders to take a 50-per-cent cut in their Greek debt holdings.

Following the vote, Papademos was to hold talks with Charles Dallara of the International Institute of Finance, a global lobbying group, on the details of a 100-billion-euro writedown of the country's debt. Dallara represents hundreds of banks worldwide that hold Greek bonds.

Meanwhile, tension could flare at an annual rally on Thursday to commemorate the 1973 uprising that led to the overthrow of the 1967-74 military dictatorship.

More than 7,000 police officers have been deployed in Athens, as the authorities fear the march could turn violent in response to months of austerity measures.

Greece received an initial 110-billion-euro bailout in May 2010 in exchange for pushing through tax hikes and spending cuts to salaries and pensions.

Without the next tranche of 8 billion euros in emergency funding, Athens would default by mid-December, experts say.