June 27, 2011
George Papandreou, Greece's American-born prime minister, faces a make-or-break week in which he seeks to steer a draconian austerity bill through Parliament in the face of a national strike and mass protests.
Success for Mr. Papandreou will earn Greece a fresh international bailout. Failure could leave Greece headed for bankruptcy within weeks and trigger financial turmoil with incalculable consequences for the euro currency area.
WSJ's Stephen Fidler has the details behind France's plan to reinvest proceeds from Greek government bonds in an effort to keep bondholders from rushing for the exits. Photo: REUTERS/John Kolesidis
The center-left premier enters his test with a stronger position than two weeks ago, when his government nearly fell apart amid mounting national despair. His ruling Socialist party has rallied around him since he reshuffled his cabinet and reasserted his determination to close Greece's budget shortfall, despite rising anger on the streets.
At issue in parliamentary votes on Wednesday and Thursday are €28 billion ($40 billion) in spending cuts and tax increases, on top of existing austerity policies, which Greece has promised the European Union and the International Monetary Fund in return for greatly expanded financial aid.
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