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Greece: Papandreou urges MPs to back austerity plan Greece: Papandreou urges MPs to back austerity plan
(25 days later)
Greek PM George Papandreou has told MPs his severe austerity plan is the only way to get Greece back on its feet.Greek PM George Papandreou has told MPs his severe austerity plan is the only way to get Greece back on its feet.
He was speaking as parliament debated the plan, the approval of which needed to secure fresh international loans.He was speaking as parliament debated the plan, the approval of which needed to secure fresh international loans.
The planned cuts and sell-offs have sparked nationwide strikes and violent protests, but the alternative appears to be national debt default.The planned cuts and sell-offs have sparked nationwide strikes and violent protests, but the alternative appears to be national debt default.
The bill is due to go to a vote on Wednesday and - if passed - would come into force the following day.The bill is due to go to a vote on Wednesday and - if passed - would come into force the following day.
It would trigger the release of 12bn euros (£10.7bn) in loans to Greece from the European Union and International Monetary Fund.It would trigger the release of 12bn euros (£10.7bn) in loans to Greece from the European Union and International Monetary Fund.
The outcome of the debate is uncertain. Mr Papandreou faces opposition from within his own Socialist ranks, with two of his own deputies saying they may oppose the bill.The outcome of the debate is uncertain. Mr Papandreou faces opposition from within his own Socialist ranks, with two of his own deputies saying they may oppose the bill.
His governing Pasok party has a slim majority, with 155 seats out of 300 in parliament.His governing Pasok party has a slim majority, with 155 seats out of 300 in parliament.
The package of measures, including tax increases, spending cuts and the sale of state assets, is thought to be worth 28bn euros in savings over five years.The package of measures, including tax increases, spending cuts and the sale of state assets, is thought to be worth 28bn euros in savings over five years.
'Only chance''Only chance'
Addressing MPs on Monday evening, Mr Papandreou called on all political parties to back the five-year plan.Addressing MPs on Monday evening, Mr Papandreou called on all political parties to back the five-year plan.

What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.
The government has already had to access a 110bn euro (£95bn; $146.2bn) bail-out package from the European Union and International Monetary Fund, and now needs a second bail-out.
Eurozone ministers are worried that if Greece were to default it would make it even more difficult for other countries such as Portugal and the Irish Republic to borrow money.
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What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.
In July 2011, Eurozone leaders and the IMF agreed to lend Greece 109bn euros ($155bn, £96.3bn) - a year after it was granted access to a 110bn euro rescue package.
Eurozone ministers were worried that if Greece was to default there would be a risk of contagion to other economies. They hope the package will resolve Greece's debt crisis and shore up the euro.
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"Our vote is the only chance for the country to get back on its feet," he said."Our vote is the only chance for the country to get back on its feet," he said.
In an interview published on Sunday, Deputy Prime Minister Theodor Pangalos was optimistic about winning the first round of general votes on tax and spending targets and the creation of a privatisation agency.In an interview published on Sunday, Deputy Prime Minister Theodor Pangalos was optimistic about winning the first round of general votes on tax and spending targets and the creation of a privatisation agency.
But he was more cautious about whether the government could get through further legislation on individual budget measures and the privatisation of specific state assets.But he was more cautious about whether the government could get through further legislation on individual budget measures and the privatisation of specific state assets.
Unions have called a two-day national strike starting on Tuesday.Unions have called a two-day national strike starting on Tuesday.
Even as the next slice of aid under the existing 110bn euro bail-out is being discussed, the EU and the IMF are debating a second rescue package that could rival the size of the existing one.Even as the next slice of aid under the existing 110bn euro bail-out is being discussed, the EU and the IMF are debating a second rescue package that could rival the size of the existing one.
They want private lenders to help out with this for the first time by agreeing to softer lending terms for the Greeks.They want private lenders to help out with this for the first time by agreeing to softer lending terms for the Greeks.
Investors' warningsInvestors' warnings
French President Nicolas Sarkozy has said his country's banks would help Greece out of its crisis by allowing it to repay its debts over 30 years.French President Nicolas Sarkozy has said his country's banks would help Greece out of its crisis by allowing it to repay its debts over 30 years.
In a rollover plan being worked out by the French government and finance chiefs, major French banks were prepared to re-lend 70% of Greek loans they hold, France's Figaro newspaper reported on Monday.In a rollover plan being worked out by the French government and finance chiefs, major French banks were prepared to re-lend 70% of Greek loans they hold, France's Figaro newspaper reported on Monday.
The British Treasury has denied it is pressing banks to "take a haircut" on their Greek debt investments.The British Treasury has denied it is pressing banks to "take a haircut" on their Greek debt investments.
On Monday, two major investors warned of the gravity of the situation facing Europe.On Monday, two major investors warned of the gravity of the situation facing Europe.
The joint head of the world's biggest bond fund manager, Pimco, said restructuring Greece's sovereign debt was inevitable.The joint head of the world's biggest bond fund manager, Pimco, said restructuring Greece's sovereign debt was inevitable.
The firm's co-chief investment officer, Mohamed El-Erian, warned the nation's problems could "contaminate" Europe.The firm's co-chief investment officer, Mohamed El-Erian, warned the nation's problems could "contaminate" Europe.
And leading investor George Soros, who reportedly made £1bn when the pound crashed out of the euro's forerunner, the ERM, said the world was on the brink of another disaster.And leading investor George Soros, who reportedly made £1bn when the pound crashed out of the euro's forerunner, the ERM, said the world was on the brink of another disaster.
Mr Soros said it was almost inevitable that one or more eurozone country would exit the single currency.Mr Soros said it was almost inevitable that one or more eurozone country would exit the single currency.