It’s the end of the line for Greek Prime Minister George Papandreou.

In a cabinet revolt led by his finance minister, Papandreou was ordered to “leave calmly in order to save his party”. He obliged, having no real choice in the matter because otherwise he would have been ousted in a vote of confidence.

He may survive the vote, but it will do him no good as part of the agreement.

Please consider Greek PM ready to go, dump referendum, for euro deal

Intense European pressure forced debt-stricken Greece to seek political consensus on a new bailout plan instead of holding a referendum after EU leaders raised the prospect of a Greek exit from the euro to preserve the single currency.

Fast-moving events in Athens overshadowed the first day of a summit of the Group of 20 major economies on the French Riviera on Thursday, with anxious world leaders urging Europe to act to stop contagion from its sovereign debt crisis.

Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialists back him in a confidence vote on Friday, government sources told Reuters.

“He was told that he must leave calmly in order to save his (PASOK) party,” one source said on condition of anonymity. “He agreed to step down. It was very civilised, with no acrimony.”

Papandreou’s Plan Backfired?

It may look that way but his days were already numbered. He was gone anyway. It is safe to say his strategy did not work. I supported the strategy because I support democracy.

Members of his own cabinet did him in, not demands from Merkozy.

What about the Next Tranche of Aid?

Radio New Zealand discusses the question of the next tranche of money in Greek PM to stand down

Finance Minister Evangelos Venizelos has warned the country needs the next €8 billion tranche of aid within the next 12 days.

But Chancellor Angela Merkel of Germany has reiterated her threat the cash will be not be available unless Greece accepts the terms of the bailout.

Mike “Mish” Shedlock
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