Holding On: Papandreou Keeps His Party in Power, but Will He Still Lead Greece?

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Louisa Gouliamaki / AFP / Getty Images

Greek Prime Minister George Papandreou claps after winning a confidence vote at the Greek Parliament in Athens on Nov. 5, 2011

Updated: November 5, 2011; 12 p.m. EDT

Prime Minister George Papandreou said Saturday that he would do "whatever it takes" to form a coalition government to unite around a crucial bailout package and save Greece from bankruptcy. After meeting with Greek President Karolos Papoulias, Papandreou said again that he would also leave his post if necessary and that the caretaker government would last about four months, until new elections can be organized.

But one of his main obstacles to creating a unity government remains: Antonis Samaras, his former roommate at Amherst College and the leader of the main opposition New Democracy, a center-right party. In the past year, Samaras has become Papandreou's most vicious critic, calling the Prime Minister a liar who is trying to blackmail Greeks into supporting him. He says he wants the Prime Minister to resign immediately and hold elections now.

Samaras says he will only join the coalition if it would agree to ratify the bailout-loan agreement, not the implementation of austerity measures, which include budget cuts and tax hikes. He favors an across-the-board reduction in taxes as part of bid to stimulate the Greek economy but has been vague on how he would find revenue to reduce Greece's large deficit. With Samaras remaining obstinate, Papandreou's center-left PASOK party is now working around New Democracy to form the coalition. They're reaching out to a right-wing party, LAOS, and a few smaller parties.

Papandreou secured a crucial vote of confidence for his government late Friday, surprising many Greeks who had left the embattled leader for dead. He won over skeptical members of his ruling PASOK party with an emotional speech in which he said he would step down if necessary and work to form a coalition government, possibly headed by Finance Minister Evangelos Venizelos, to save the new debt agreement. That coalition government would prepare the country for elections by February. "The last thing I care about is my post," Papandreou told Parliament. "I don't care even if I am not re-elected. The time has come to make a new effort ... I never thought of politics as a profession."

The continuity of the Greek government averts — at least for the next few days — a European meltdown over the debt crisis. It aims to secure a landmark deal struck by European leaders on Oct. 27 that will significantly reduce Greece's debt burden and offer more bailout loans, but with the understanding that austerity measures must be implemented. But there's still uncertainty over who will be Premier in the coalition government preceding that vote and what kind of leader the new elections will bring in a country as politically divided as Greece.

Euro-zone leaders and the markets have been watching Greece anxiously as it slogs through its worst economic crisis in recent memory. Papandreou set off a worldwide panic earlier this week when he said he would ask Greeks to vote on the latest bailout deal in a referendum. The leaders of Germany and France were so angry that they summoned him to the G-20 summit in the French Riviera and told him the referendum had to be about whether Greeks wanted to stay in the euro zone. Papandreou rescinded the referendum, but he insists that his intention was to give Greeks a direct voice in the country's fate. "I believe a 'yes' was certain because I believe deeply that it was in the nation's best interest," he told Parliament before the midnight confidence vote.

Analysts say the referendum was a typically idealistic move by a politician who has good intentions but no real political savvy, at least in the rough-and-tumble world of Greek politics. "Many people call him a traitor, because they blame him for austerity and the bad system in Greece and so forth," says Nikos Xydakis, a columnist and top editor at Kathimerini, a prominent Greek newspaper. "But that's a heavy word, and the wrong word. I wouldn't call him that. Papandreou is a prince; he's the son of a beloved demagogue from a storied family. He's a good man, but he's not enough, at least not for this job. He would have been O.K. if Greece was like a calm, peaceful sea. Now he's at the helm when the winds are 12 Beaufort. He can't handle it."

The 59-year-old Papandreou, who was born in St. Paul, Minn., and educated in the U.S. and the U.K., has absorbed much of Greek hatred for the harsh austerity measures prescribed by international lenders in exchange for billions in international bailout loans. His quiet, deliberate personality already made many Greeks see him as an outsider even though he hails from the ultimate family of political insiders; his father and grandfather were both Premiers, and the Papandreou dynasty is sometimes called the Greek equivalent of America's Kennedys. George Papandreou does not have the natural dynamism of his late charismatic father, Andreas, who founded PASOK that the son now leads. At antiausterity demonstrations, protesters hold up hand-drawn posters of George Papandreou depicted as an alien in a spaceship or a geeky guy in running shorts wrapped in an American flag or as a puppet of German Chancellor Angela Merkel (who is often Photoshopped to appear like she is dressed as an SS officer).

Papandreou's legacy as the scion of Greece's most prominent political dynasty is the least of his worries right now. There is much speculation that he will give hand over the premiership to Finance Minister Venizelos. The two men chatted happily, according to reports, after Friday's confidence vote.

Kostas Kleftoyiannis, who owns a minimarket near central Athens, says both the Greeks and the Europeans are scapegoating the Prime Minister. "Papandreou got handed a hot potato. He dropped it on our head sometimes, so, yes, he messed up a lot," said Kleftoyiannis, who's in his 60s and struggling to keep his shop going. "But the problem is much bigger than him. It's a problem with our system, which is corrupt. It's also a problem with a global economy that's run by a bunch of punks at Moody's who decide, based on criteria I don't even understand, to issue ratings that cut off the legs of a country already in recession. I just hope that Greece doesn't keep being the world's debt-crisis guinea pig. It's killing us."