Greece’s PM Pushes Austerity Plan Amid Protests

In the wake of Europe’s financial crisis, Greece’s Prime Minister George Papandreou is working to pass further austerity measures that must be approved in order for the nation to receive aid from the IMF and European Union. The plan proposes 28-billion euros in spending cuts and tax raises over a 5-year period, a measure met with resistant and visible protest from the population.

But without the plan, Greece will not receive the EU’s and IMF’s 110-billion euro bail-out package, which could result in the nation defaulting on payment of its 340-billion euro debt ($485 million). The eurozone ministers — the finance ministers from the 17 countries that use the euro — are also preparing a second bailout package of 120-billion euros, which will include loans from other eurozone countries as well as voluntary contributions from private investors. The reforms must be implemented in time for a meeting of the eurozone finance ministers on July 3.

Panpandreou reshuffled his cabinet, appointing former Defense Minister Evangelos Venizelos as his new finance minister. The new cabinet was approved with a close 155-to-143 vote of the parliament, which voted strictly along party lines. Although the PM won the confidence vote, Panpandreou does not have all of the support of his own Socialist party, despite calling for unity in this economic crisis.

Panandreou must convince the parliament to approve the plan by June 28, or Greece risks losing the EU and IMF bailout money that it desperately needs to pull itself out of its sky-high debt.