During his speech at the extraordinary meeting of ruling Pasok's parliamentary group, on Wednesday afternoon, Prime Minister George Papandreou stressed: "We are not abandoning the fight to save the country and Greece is still standing. "In the last 20 months I have fought for Greece all over the world under bleak circumstances. I understand the pain, even the anger of the people. Today we are asked to take on historic responsibilities. It's in our hands to decide, to realise, to continue the difficult work."
At the time of writing this article, PASOK MPs have begun taking the stand and with dozens having asked to speak, the meeting is expected to continue well into the night.
*Note to all readers, article will be updated every hour, because the news is still running
Papandreou's address in Parliament before his party MPs took the floor
Talks to form a Greek coalition government with rival Conservatives collapsed Wednesday, and the country's political crisis deepened Thursday as Papandreou saw two of his Socialist lawmakers resign.
The party feud was the latest crisis to heighten worldwide concern that a Greek financial collapse could trigger panic elsewhere in the 17-nation eurozone - a fear that saw borrowing costs in vulnerable EU countries surge and stock markets come under pressure. "We will prevail and we will hold on. We have as a country in the past successfully faced major crisese. As hard at this struggle is, we cannot run away from our fight," Papandreou told party lawmakers in an emergency meeting Thursday in Parliament. "We will fight and we will win, for Greece, its people and the future of the new generations."
The prime minister said he would keep seeking a consensus with the opposition over the financial reforms that creditors have demanded as part of an international bailout.
"I will serve and continue to serve the effort for broader consensus and we hope that this effort ultimately is successful," he said. "But I have learned to battle on my own." He also admitted his government had displayed "mistakes and weaknesses," but promised a new, stronger Cabinet in a reshuffle expected to be announced later Thursday.
Papandreou is trying to push through a five-year austerity program worth euro28 billion ($39.5 billion) that has been demanded by international creditors. The new spending cuts and taxes have spurred violent street protests as well as the party rebellion.
EU officials in a rut with everything that is happening in Greece
In Brussels, top EU finance official Olli Rehn said eurozone ministers would likely agree Sunday to give Greece the next euro12 billion ($17 billion) installment of loans from the euro110 billion ($155 billion) bailout package. "It means that the funding of the Greek sovereign debt can now be ensured until September," Rehn said, adding that a decision on a second bailout to cover Greek financing gaps next year is still pending. "The next days will be critical for the financial stability and economic recovery in Greece and Europe," Rehn warned. "I trust all leaders in Greece and Europe realize their responsibility and will act accordingly."
The Greek prime minister spoke by phone earlier in the day with German Chancellor Angela Merkel to discuss negotiations over the second bailout for Greece. The cost of insuring against default on Greek, Irish and Portuguese government debt surged to records, driving a gauge of sovereign bond risk to an all-time high, on concern Europe’s deficit crisis is worsening.
Political turbulences forced the Athens Stock Exchange into further losses and new lows on Thursday, following the failure to form a unity government.
While new resignations of ruling party MPs and hearsay that Greek government proceeds with either cabinet reshuffle or early elections concern Eurozone countries and IMF, the General Index moved downwards throughout the trading session, posting intraday losses of 3.68%, below 1.200 units. Comments and statements of European officials on the disbursement of the fifth slide of the loan to Greece failed to calm the market, as banks were at the epicenter of pressures, with the index posting intraday losses of 4.67%, before it end at 891.12 units, down by 3.37%. Meanwhile, Credit-default swaps on Greece soared 280 basis points to 2,050, while Ireland rose 36 to 802 and Portugal climbed 17 to 814, according to CMA prices at 3:30 p.m. in London. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments jumped 11 basis points to 236.5.
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