Greek PM Calls For Support, Plans Referendum

UPDATE: Greek PM Calls For Support, Plans Referendum

ATHENS (Dow Jones)--Prime Minister George Papandreou Sunday called on parliament to back his newly-formed cabinet, as Greece sought fresh aid from its European partners and with just weeks to go before the country is due to run out of cash.
"I request a vote of confidence so that we can, with a strong voice, negotiate a new agreement," Papandreou said.
Speaking at the start of a three-day debate ahead of a vote of confidence late Tuesday, Papandreou also said he would propose a referendum on political and constitutional reforms for later this autumn.
The reforms would aim to change a number of long-standing issues in Greece's political system--such as the rules on political party finances or legal protections now enjoyed by government ministers--that are the source of widespread public discontent with the political system.
Papandreou said he would set up a committee to collate and work through reform proposals and pledged the government would "immediately afterwards to go for a referendum. In another words: in the autumn. In the autumn we will go for a referendum about the big changes needed for the country."
His remarks come days after a mass protest and strike over the government's latest austerity plan shook Greece's political establishment, and touching off a revolt within the ruling Socialist party.
In an effort to assuage both public opinion and the Socialist rank-and-file, Papandreou reshuffled his cabinet Friday, sacking his unpopular finance minister, George Papaconstantinou, who was seen as the architect of those austerity measures.
In May last year, Greece narrowly avoided default with the help of a EUR110 billion bailout from its fellow euro-zone members and the International Monetary Fund.
But facing still prohibitively high borrowing costs on international markets, Greece now needs another EUR100 billion or so in fresh loans to cover its borrowing needs for the next three years.
Papandreou said he would travel to Brussels for talks Monday and Tuesday with European Commission President Jose-Manuel Barroso and European Council President Herman Van Rompuy about a new aid deal for the country.
Meanwhile, in one of his first duties since assuming the role, Greece's newly appointed finance minister, Evangelos Venizelos, will meet with fellow euro-zone finance ministers in Luxembourg on Sunday and Monday to discuss the aid deal.
But as a quid-pro-quo for any further loans, Greece has promised to pass a EUR28 billion austerity package aimed at slashing the budget deficit over the next five years.
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