Greece appeared to step back from the prospect of a devastating debt default Friday after its prime minister quelled chaotic political infighting and Germany softened a contentious demand that the private sector participate in a European bailout.
After two days of dissent inside his Socialist party that threatened to bring down his government, Prime Minister George Papandreou named his main internal rival as finance minister. The move is expected to solidify the support from lawmakers Papandreou needs to pass a 28 billion euro ($39.5 billion) package of steep tax hikes and budget cuts so despised inside Greece that riots exploded outside parliament this week.
European donors and the International Monetary Fund require Greece to pass the austerity measures before releasing the next 12 billion euro ($17 billion) loan from a 110 billion euro package agreed on last year to keep Greece afloat until it reins in spending and increases government revenue.
AP
