Greeks to form unity government, without Papandreou at the helm

Greek Prime Minister George Papandreou addresses a press conference at the end of a summit of the EU heads of State on June 24, 2011 in Brussels.
Jean-Christophe Verhaegen

ATHENS, Greece – Political negotiations appear to have brought Greece closer to a resolution of the political crisis that began last Monday, when Prime Minister George Papandreou called for a referendum on the euro zone bailout.

In talks tonight, Papandreou and opposition leader Antonis Samaris agreed to form a unity government, with a new leader who has yet to be chosen. 

The deal marks the end of a tumultous political chapter for Papandreou, whom many Greeks blame for their country’s problems. Apparently foreshadowing his resignation, on Friday the politician sought to define his legacy in a last speech to parliament as prime minister.

Papandreou’s address, delivered before he survived a confidence vote, touched on personal sacrifices, his family’s celebrated history in Greek politics, as well as accomplishments since taking office in October 2009.

He offered to step down from his leadership post on the condition that the controversial 130 billion euro bailout deal is approved. 

Papandreou is the son and grandson of prime ministers, both of whom are revered figures in modern Greek history.

His grandfather, also named George, led Greece after World War II and again in the 1960s. Andreas Papandreou founded the current ruling socialist PASOK party and was prime minister from 1981-89 and once more in the mid-90s.

On Friday night, Papandreou said he inherited from his grandfather “only a watch, nothing else,” and from his father, “his name, nothing more.” But their public careers exemplified devotion to country, democracy and social justice, he said.

“This tradition gives me strength,” he said. 

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In his speech, Papandreou noted how he was labeled a “traitor” for reaching out to rival Turkey. But now, “all welcome agreements with our neighbor,” he said.

He was called “anti-Greek” for daring to tackle problems in Greece’s dysfunctional university system. But parliament passed legislation to reform the system with the rare backing of the leading opposition party.

Papandreou has also pushed for greater transparency in government, launching initiatives to fight corruption and rebuild a broken tax collection system. By some estimates, Greece loses up to $30 billion annually to tax evasion.

Papandreou said he was handed problems that had “accumulated over decades,” including out-of-control government spending. He encountered a $400 billion debt when he entered office.

His popularity sank as pensions and wages were slashed and taxes increased. Greece’s image took a hit internationally, as the government carried out deficit-reducing dictates of the European Union and the International Monetary Fund.

More from GlobalPost: View from Athens- Giving Greeks a voice. 

Greeks have called strikes, some of which turned violent, and occupied government buildings in protest. Opposition parties fought Papandreou, who was forced to pass unpopular austerity measures with his party’s slim majority.

Greece now survives off a $150 billion EU-IMF bailout. A new $180 billion package was announced October 27 and includes a 50-percent write-off of Greek debt held by private investors.

The US-educated Papandreou had indicated he would step out of the way in favor of a coalition government in a last-ditch bid for cross-party unity.

“I do not care if I am not re-elected,” he said in his speech Friday. “I never saw politics as a profession.”