Greek Prime Minister Will Form New Government

Thousands of Greeks protested austerity measures today

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After a day in which thousands of Greeks marched on parliament to protest the government's second round of budget cuts to avert bankruptcy, Prime Minister George Papandreou announced in a televised address that he'll form a new government tomorrow and request a vote of confidence for his Socialist party. Earlier in the day, a Papandreou aide told The New York Times that the prime minister had offered to resign so that his party could form a coalition government with the center-right opposition on the condition that it support more international financing for the cash-strapped country. An aide to opposition leader Antonis Samaras, who supports tax breaks rather than spending cuts, told the Los Angeles Times that any agreement for a unity government would need to include Papandreou's resignation and a renegotiation of the new bailout package.

The developments have important consequences for Greece, Europe, and international markets. The Times explains that Greece's leaders are facing "the nearly impossible task of balancing the demands of their hard-pressed citizens with those of the International Monetary Fund and the European Union, which are asking for more austerity measures in return" for more money. The paper adds that the instability in Greece has spooked world financial markets, "which fear that Greece's failure to agree on new austerity measures could lead to a default that could ignite a series of crises in other heavily indebted euro zone countries, like Portugal, Ireland and Spain. That, in turn, could threaten Europe's banks."

Meanwhile, in a sign of the desperation in the country, many pictures are emerging of Greek protesters clashing with police today. This Reuters photo shows clashes in Athens's central Syntagma (Constitution) Square

In this Reuters photo, police hurl tear gas at protesters:

And, finally, on a lighter note, protesters take a moment to dance to traditional Greek music in this AP photo:

This article is from the archive of our partner The Wire.