Greece in Crisis: Prime Minister Pleads with Public while Bailout Negotiations Continue

Greece Prime Minister George Papandreou pleaded for unity and strength with his constituents on Sunday, as European Union and IMF officials scrambled to avoid a catastrophic bankruptcy for the Mediterranean country. "The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks and the country's credibility," Papandreou told parliament. Papandreou has urged his country to adopt strict austerity measures in light of inadequate tax revenues and a burdensome sovereign debt obligation. Greece has failed to right its financies since receiving a $100 billion+ bailout package last year. According to a New York Times report, "At a meeting in Luxembourg on Sunday night, the 17 countries in the euro zone are likely to pledge the release of the next 12 billion euro or $16.8 billion installment of a $155 billion loan package that Athens received a year ago. Finance ministers will also grapple with the complex task of designing another package of financial assistance that would include private sector involvement — but not on terms that would be classified as a default." Tuesday night will mark a confidence vote in Mr. Papandreou's new Cabinet, which will be a crucial factor in how a potential second bailout is structured. Papandreou has indicated that he is willing to make drastic changes to the country's economic and social system. The Times report notes that "Mr. Papandreou told Parliament that “a lack of meritocracy and transparency in the state sector along with corruption and overconsumption have contributed to the current economic situation.” Ongoing negotiations between Greek leaders and officials at the European Union and International Monetary Fund have yielded little visible progress. Ratings agencies have begun to take aim at countries and banks that have exposure to Greece's shaky financial structure. Global economic markets have kept a close eye on the unfolding Greek situation, and this week likely won't be an exception. Indeed, European, Asian and American equity markets have suffered mightily when uncertainty in Greece is at its highest.