Greek government survives confidence vote. Now, the hard part.

The Greek government survived a parliamentary confidence vote last night, but Prime Minister George Papandreou's hobbled government must clear a larger hurdle next week by passing an unpopular austerity measure worth $40 billion to avoid possible bankruptcy and default in July.

The confidence vote saw 155 members of Mr. Papandreou’s Panhellenic Socialist Movement (PASOK) party back him in the 300-seat body by ratifying last week's cabinet reshuffle that followed protests over the austerity package.

Greece needs $17 billion by July 15 to avoid defaulting on its debt. Athens is in the midst of a second bailout plan with the European Union, the International Monetary Fund, and the European Central Bank after an earlier $110 bailout, agreed in May 2010, was acknowledged in late winter to be inadequate. Greece indebtedness is upwards of $500 billion.

Ahead of the last night’s vote, Papandreou, who replaced his finance minister with a key rival from his own party to placate opponents, made his own impassioned plea that, “If we are afraid, if we throw away this opportunity, then history will judge us very harshly.”

Yet the mood outside parliament on Syntagma Square, where protestors have gathered in large numbers, remained opposed to further cuts in a system where some 1 million out of 11 million Greeks owe their living to the state. While some analysts say the protest movement that has camped out on the square since May 24 is losing steam, that wasn't evident last night.

The broad sense among protestors is that elite politicians are agreeing to plans dictated in Brussels and the IMF in Washington that will tie the nation to an impossible yoke for the indefinite future – and that involves a fire sale of Greek state assets including airports and utilities at bargain basement prices.

Many called for new elections and shouted, “thieves, thieves, thieves” with palms and fingers stretched out and flapping in what is a derogatory Greek expression.

“We are not just some people that exist to keep an economy and a finance system grinding on,” says Filos, a tall 20-something.

1 | 2

Next