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Greece PM Papandreou faces knife-edge confidence vote Greece PM Papandreou faces knife-edge confidence vote
(about 2 hours later)
  
Greece's PM George Papandreou is set to face a crucial no-confidence vote, with the outcome on a knife-edge.Greece's PM George Papandreou is set to face a crucial no-confidence vote, with the outcome on a knife-edge.
Mr Papandreou shocked EU partners and sent markets into turmoil after calling for a referendum on a hard-fought EU deal to bail out debt-ridden Greece.Mr Papandreou shocked EU partners and sent markets into turmoil after calling for a referendum on a hard-fought EU deal to bail out debt-ridden Greece.
The finance minister said on Friday the referendum had now been scrapped, but even if the PM wins he faces an unclear future, amid new calls to resign.The finance minister said on Friday the referendum had now been scrapped, but even if the PM wins he faces an unclear future, amid new calls to resign.
The developments have overshadowed a key G20 meeting in Cannes.The developments have overshadowed a key G20 meeting in Cannes.
In Athens, thousands of protesters have gathered in Syntagma Square ahead of the vote, and security has been tightened around the nearby parliament building.
Eurozone leaders fear that failure to solve the Greek debt crisis could risk it spreading to other vulnerable economies, particularly Italy.Eurozone leaders fear that failure to solve the Greek debt crisis could risk it spreading to other vulnerable economies, particularly Italy.
Germany had said a referendum would essentially be a vote on whether Greece wanted to be part of the EU and that the stability of the eurozone was more important than Greek membership.Germany had said a referendum would essentially be a vote on whether Greece wanted to be part of the EU and that the stability of the eurozone was more important than Greek membership.
Motives questionedMotives questioned
The figures in the Greek parliament reveal Mr Papandreou's vulnerability.The figures in the Greek parliament reveal Mr Papandreou's vulnerability.
After fighting calls for his resignation, George Papandreou now faces his next big test: a confidence vote in parliament this evening. It could be tight - very tight. He has a parliamentary majority of just two. If Prime Minister George Papandreou survives the confidence vote, his socialist party (Pasok), which has a slim majority in parliament, may rally around him now that he has dropped the idea of a referendum on the EU bailout plan.
A handful of his MPs had threatened to vote against him if he pursued a referendum on last week's debt deal for Greece. But Elena Panaritis - one of the MPs planning to rebel - told me she would now support the prime minister because, in her view, the referendum will not take place. Mr Papandreou may then try to set up a coalition government or a government of national unity with New Democracy which would ratify the bailout plan. But this will not be easy given the enmity between the two parties.
If Mr Papandreou's other dissident MPs follow suit, he could scrape through. Many, though, are speculating that he would still seek to form a national unity government afterwards, possibly to make a dignified exit. But with the opposition leader calling for Mr Papandreou's resignation, any new coalition would presumably need to have another leader at the helm. Even if he wins the vote, the prime minister could choose to step down, feeling he is discredited in the eyes of the electorate and the international community. His powerful Finance Minister Evangelos Venizelos could replace him.
If Mr Papandreou loses the vote of confidence and resigns, the Greek president then has a choice. Either he calls a general election, which could be held at the earliest in December, or he could allow the major political parties in the existing parliament to set up an interim government led not by politicians but by technocrats.
His governing Socialist party (Pasok) holds a tiny majority - 152 out of 300 seats.His governing Socialist party (Pasok) holds a tiny majority - 152 out of 300 seats.
A handful of his MPs had indicated they would refuse to back him in the confidence vote, which is expected late on Friday, possibly around 22:00 GMT. A handful of his MPs had indicated they would refuse to back him in the confidence vote, which is expected at 22:00 GMT on Friday. The final debate leading up to the vote got under way shortly after 16:00 GMT.
However, the BBC's Mark Lowen in Athens says there are suggestions some potential rebel MPs will now support Mr Papandreou after the possibility of a referendum receded.However, the BBC's Mark Lowen in Athens says there are suggestions some potential rebel MPs will now support Mr Papandreou after the possibility of a referendum receded.
The vote is timed to take place when the markets in Europe and the US are closed, such is the sensitivity of the issue.The vote is timed to take place when the markets in Europe and the US are closed, such is the sensitivity of the issue.
There had been serious divisions in Pasok on the referendum, with Finance Minister Evangelos Venizelos insisting it should not be held.There had been serious divisions in Pasok on the referendum, with Finance Minister Evangelos Venizelos insisting it should not be held.
He told European partners on Friday that Greece had officially scrapped the referendum.He told European partners on Friday that Greece had officially scrapped the referendum.
Mr Venizelos said he had informed EU Economic and Monetary Affairs Commissioner Olli Rehn, German Finance Minister Wolfgang Schaeuble and eurozone chairman Jean-Claude Juncker of the decision.Mr Venizelos said he had informed EU Economic and Monetary Affairs Commissioner Olli Rehn, German Finance Minister Wolfgang Schaeuble and eurozone chairman Jean-Claude Juncker of the decision.
Mr Papandreou had earlier said the referendum was never an end in itself, and there were two other choices - an election, which he said would bankrupt the country, or a consensus in parliament.Mr Papandreou had earlier said the referendum was never an end in itself, and there were two other choices - an election, which he said would bankrupt the country, or a consensus in parliament.
He called for talks with the opposition on a coalition government.He called for talks with the opposition on a coalition government.
The strategy of the main opposition New Democracy is unclear.The strategy of the main opposition New Democracy is unclear.
Its leader Antonis Samaras on Thursday led his MPs in a dramatic walkout of parliament and called for snap elections.Its leader Antonis Samaras on Thursday led his MPs in a dramatic walkout of parliament and called for snap elections.
Mr Samaras questioned the motives behind Mr Papandreou's actions.Mr Samaras questioned the motives behind Mr Papandreou's actions.
"I am wondering; Mr Papandreou almost destroyed Greece and Europe, the euro, the international stock markets, his own party in order to ensure what? So that he could blackmail me and the Greek public? Or to ensure what I had already said several days ago; that I accept the bailout agreement as unavoidable?""I am wondering; Mr Papandreou almost destroyed Greece and Europe, the euro, the international stock markets, his own party in order to ensure what? So that he could blackmail me and the Greek public? Or to ensure what I had already said several days ago; that I accept the bailout agreement as unavoidable?"
New Democracy MP Simos Kedikoglou told the BBC's World Today programme that while it backed adopting the bailout, that did not mean it supported Mr Papandreou remaining prime minister.New Democracy MP Simos Kedikoglou told the BBC's World Today programme that while it backed adopting the bailout, that did not mean it supported Mr Papandreou remaining prime minister.
So even if Mr Papandreou survives, speculation will mount about his position.So even if Mr Papandreou survives, speculation will mount about his position.
Government sources told Reuters news agency that Mr Papandreou had agreed at a cabinet meeting on Thursday to stand down once he had negotiated a coalition with the opposition.Government sources told Reuters news agency that Mr Papandreou had agreed at a cabinet meeting on Thursday to stand down once he had negotiated a coalition with the opposition.
One source said: "He was told that he must leave calmly in order to save his party. He agreed to step down. It was very civilised, with no acrimony."One source said: "He was told that he must leave calmly in order to save his party. He agreed to step down. It was very civilised, with no acrimony."
Health Minister Andreas Loverdos wrote on his blog on Friday that it was "inconceivable" that the government should win the confidence vote "and then pretend that nothing had happened".Health Minister Andreas Loverdos wrote on his blog on Friday that it was "inconceivable" that the government should win the confidence vote "and then pretend that nothing had happened".
"Unless immediate steps are taken toward the formation of a national unity government, I will no longer wish to take part in that political process," he said."Unless immediate steps are taken toward the formation of a national unity government, I will no longer wish to take part in that political process," he said.
European Commission President Jose Manuel Barroso told the BBC's Today programme he expected a government of national unity to be formed and that the economic problems "will be solved".European Commission President Jose Manuel Barroso told the BBC's Today programme he expected a government of national unity to be formed and that the economic problems "will be solved".
Opinion pollOpinion poll
The G20 is meeting for a second and final day in Cannes.The G20 is meeting for a second and final day in Cannes.
UK Finance Minister George Osborne said that it was important for the world to be prepared for whatever happened in Greece.UK Finance Minister George Osborne said that it was important for the world to be prepared for whatever happened in Greece.
EU President Herman Van Rompuy said leaders had agreed to increase the firepower of the International Monetary Fund (IMF), but gave no specifics on the funding.EU President Herman Van Rompuy said leaders had agreed to increase the firepower of the International Monetary Fund (IMF), but gave no specifics on the funding.
At the end of the first day, the French host, President Nicolas Sarkozy, said France and Germany had helped Greek politicians focus on what was at stake.At the end of the first day, the French host, President Nicolas Sarkozy, said France and Germany had helped Greek politicians focus on what was at stake.
Mr Papandreou had been summoned for urgent talks at the G20 on Wednesday, where he was told that any referendum would turn on the question of whether Greece wanted to stay in the eurozone.Mr Papandreou had been summoned for urgent talks at the G20 on Wednesday, where he was told that any referendum would turn on the question of whether Greece wanted to stay in the eurozone.
The next tranche of Greece's existing bailout was also put on hold.The next tranche of Greece's existing bailout was also put on hold.
Without the bailout funds, Greece will probably go bankrupt before the end of the year.Without the bailout funds, Greece will probably go bankrupt before the end of the year.
The EU bailout deal, agreed last month, would give the heavily indebted Greek government 130bn euros (£111bn; $178bn) and it imposes a 50% write-off on private holders of Greek debts, in return for deeply unpopular austerity measures.The EU bailout deal, agreed last month, would give the heavily indebted Greek government 130bn euros (£111bn; $178bn) and it imposes a 50% write-off on private holders of Greek debts, in return for deeply unpopular austerity measures.
Although the Greek public has strongly resisted the austerity measures, a recent opinion poll in a newspaper showed 70% wanted to remain within the eurozone.Although the Greek public has strongly resisted the austerity measures, a recent opinion poll in a newspaper showed 70% wanted to remain within the eurozone.