Greek Prime Minister George Papandreou survived a confidence vote early on Saturday, calming a vicious revolt in his Socialist party with an emotional pledge to step aside if necessary and seek a cross-party government lasting four months to safeguard a new European debt agreement.
Papandreou won the critical parliamentary confidence motion 153-145 after a week of drama in Athens that horrified Greece's 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, who warned that the debt-ridden country still faced ‘mortal danger,’ said the new government would last until the end of February. But conservative opposition leader Antonis Samaras demanded immediate elections.
He did not say whether he would join coalition talks, due to be formally launched later on Saturday when Papandreou meets the country's president. "The masks have fallen," Samaras said. "Mr. Papandreou has rejected our proposals in their entirety. The responsibility he bears is huge. The only solution is elections."
Midway through its four-year term, Papandreou's government came under threat after his disastrous bid this week to hold a referendum on a major new European debt agreement.
The idea was swiftly scrapped on Thursday after an angry response from markets and European leaders who said any popular vote in Greece would determine whether the country would keep its cherished euro membership.