Greeks agree coalition government without Papandreou

 
George Papandreou at emergency cabinet meeting, 6 November 2011 George Papandreou had already made clear his willingness to step aside

Greek leaders at crisis talks in Athens have agreed to form a new national unity government, the president's office says.

Beleaguered Prime Minister George Papandreou has agreed to stand down and his successor will be chosen during talks on Monday, a statement said.

The coalition is to lead the country until elections, which could be held on 19 February, the finance ministry said.

The announcement followed a week of turmoil over Greece's debt crisis.

Once the new leader is named, Mr Papoulias will invite parties to join the new government, according to the statement from the president's office.

The plan envisages elections once the government approves an EU bailout package.

Talks between Mr Papandreou and main opposition leader Antonis Samaras were hosted by President Karolos Papoulias on Sunday evening.

Mr Papandreou had been trying to build a national unity government to replace his Pasok party administration, but Mr Samaras, of the New Democracy party, had been refusing to negotiate unless his rival resigned first.

Analysis

This was the final act in a week of political turmoil. The prime minister and the leader of the opposition were brought together by Greece's president to decide on a new national unity government.

Nobody was certain an agreement would be reached. Both sides have played a high-stakes game of political brinkmanship in the last few days.

But both knew patience was waning and this could be the last chance to find consensus.

As the talks continued, Greeks watched and waited. This country has been in the grip of uncertainty for days, political wrangling adding to its financial woes.

In the bars and cafes of Athens, ordinary people are craving stability and a leader who can steer Greece towards calmer waters.

The two men also disagreed sharply on the timing of new elections, with Mr Papandreou seeking a delay of several months while Mr Samaras wanted them immediately.

There has been speculation that the new coalition could be led by current Finance Minister Evangelos Venizelos or by Lukas Papademos, a former deputy president of the European Central Bank.

A Greek government spokesman a new administration would be sworn in and a confidence vote held within a week if all went well.

"Today was a historic day for Greece," Ilias Mossialos said.

A spokesman for the New Democracy party said it was "absolutely satisfied" with the outcome of the talks.

"Our two targets, for Mr Papandreou to resign and for elections to be held, have been met," the New Democracy spokesman told AP news agency, speaking on condition of anonymity.

At a late-night meeting on Sunday, Mr Venizelos met opposition members and agreed that 19 February would be the most suitable date for elections, according to a finance ministry statements.

However few other details have emerged, such as how quickly the bailout deal might be approved.

Referendum plan

Mr Papandreou narrowly won a confidence vote on Friday, but had been under continuing pressure to resign amid chaos over the debt crisis.

Eurozone deal

  • Private banks holding Greek debt accept a 50% loss
  • European Financial Stability Facility (EFSF) to be boosted to 1tn euros ($1.4tn:£880bn)
  • Banks told to recapitalise by 106bn euros

The fresh bailout deal was agreed by the European Union last month, but Mr Papandreou faced the wrath of fellow EU leaders when he announced that he would put the deal to the people of Greece in a referendum.

The idea was dropped days later, but not without sparking a deeper financial crisis and triggering the political crisis which led to the confidence vote.

The EU says no more funds will be released to Greece until the new bailout deal has been approved.

It gives the government 130bn euros (£111bn; $178bn) and imposes a 50% write-off on private holders of Greek debts, in return for deeply unpopular austerity measures.

The country has come under huge international pressure to resolve its political crisis, in order to calm the markets.

The possibility of Greece leaving the euro has also been raised by EU leaders, if it fails to resolve its political and financial problems.

A meeting of EU finance ministers is taking place on Monday, which added to the pressure on Greece to find an early solution to the political deadlock.

News of the crisis talks involving President Papoulias emerged after an emergency cabinet meeting led by Mr Papandreou.

Both Mr Papandreou and Mr Samaras had held separate talks with the president earlier in the weekend.

 

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  • rate this
    +14

    Comment number 161.

    This is a catastrophe for democracy. When a government decides who is in government and then asks the rest to join that is very dangerous territory The Greek people will not accept this. It seems rather ironic that the country that invented democracy, should be the first to lose it.

  • rate this
    -10

    Comment number 103.

    Spare us tears over the lost referendum cause in Greece. The Eurozone is teetering on the edge of a cliff, multiple defaults and recession are looming, and you want everyone to sit on their hands and wait for a referendum in December… maybe. The urgency is overriding, and survival supersedes the luxury of customary niceties.

  • rate this
    +13

    Comment number 99.

    I don't see how changing the government is going to make any difference. To accept the bailout the austerity measures still have to be passed. Why do the people always suffer for the folly of politicians?

  • rate this
    +8

    Comment number 94.

    Oh gosh, what a mess.....but perhaps a necessary mess (for us all). Greed is not a stable foundation on which to build anything. The pain of loss will hopefully bring us back to the basics of what is important in life - love for eachother. My blessings to the good Greek people

  • rate this
    +5

    Comment number 60.

    Greece will default and the Euro will fail. When and how far apart these two incidents will occur is uncertain but for sure that's how it will eventually play out.

 

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