George Papandreou won the critical confidence motion with a vote of 153-145 after a week of drama in Athens that horrified its European partners, spooked global markets and overshadowed the Group of 20 summit in the French resort of Cannes.
The threat of a Greek default or exit from the common euro currency has worsened the continent's debt crisis, which is already struggling under bailouts for Greece, Ireland and Portugal.
Finance Minister Evangelos Venizelos said the new government that will be formed would last until the end of February.
The latest agreement between the EU with Greece involves three components: leveraging the power of the 440 Euro already committed to the European Financial Stability Facility (EFSF), erasing 50 percent of Greek debt and requiring European banks to significantly boost capital levels. Putting aside the question of where the money will come from, it seems that, if successful, this plan should be enough to calm the markets in the near term. However, the plan should be viewed as a temporary solution to more systemic problems in Europe.
EU-Digest
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