EU stress: Endgame for Papandreou?

The crisis in Greece is turning worse by the minute. The government has lost its majority in parliament. Prime Minister George Papandreou is now left with the support of just 149 MPs in a parliament of 300.

The Greek prime minister has called for an emergency cabinet meeting, and is expected to meet the country's president later today. Agencies report that Papandreou may offer his resignation. A coalition government led by Lucas Papademos, the former vice president of the ECB is one of the alternatives that are being considered. Meanwhile, the government spokesperson has announced that the government is ready to hold talks with the opposition on their demand for a caretaker government until snap elections are held. Even if Papandreou survives Thursday, he faces another test tomorrow when the Greek parliament will hold a vote of confidence. If it is defeated, the Greece may have to face a new election. Europe's leaders have given Greece an ultimatum demanding the beleaguered nation to declare whether it wanted to remain part of the Eurozone or risk going alone in a dramatic secession. In fact, France and Germany have gone to the extent of saying that they would treat the referendum as a vote on Greece's euro membership. That's not all! EU and IMF have threatened to withhold the next tranche of the promised bailout money, in the event Athens can't provide assurances until the referendum. This means that the eight billion euro payment will be in limbo until after the referendum vote, which isn't even scheduled to be held until December. ECB surprises, cuts rates The prospect of Greece exiting the monetary union seems to have played on the minds of even the ECB. The European Central Bank unexpectedly cut interest rates by 25 basis points to 1.25%. However the bank