NEWS

Greece turns to coalition gov't to tackle crisis

Greece should have a coalition government and new prime minister on Monday after outgoing Premier George Papandreou and New Democracy leader Antonis Samaras struck a deal in principle last night to form an interim administration that will ensure Athens adopts the latest eurozone bailout before calling elections.

The two leaders met at the Presidential Palace at 8.30 p.m. on Sunday after Papandreou earlier convened a meeting of the Cabinet to announce he had no intention of heading the new government and would be stepping aside. This commitment appears to have been enough to bring Samaras to the negotiating table.

The ND leader had insisted that Papandreou should resign first before any coalition talks could begin.

The talks between the two leaders, which were chaired by President Karolos Papoulias, lasted 45 minutes. After the meeting, a brief statement was issued explaining that the two sides had agreed in principle to form a new government without Papandreou as its leader. Crucially, the statement also indicated that the two sides had agreed to adopt the October 26 eurozone deal to reduce Greece?s debt by some 100 billion euros and to supply it with another 130 billion euros in loans. Earlier last week, Samaras had indicated he was prepared to accept the loan and haircut for Greek bondholders but was opposed to the austerity measures that would be attached to the deal.

?There will be an immediate meeting between representatives of the two sides to determine the obligations that stem from the implementation of the October 26 agreement,? Papoulias said in his brief statement. The president said that the interim government would call elections as soon as the eurozone debt deal has been implemented. This could be by the end of February.

Papandreou and Samaras are due to meet again on Monday to decide who will lead the coalition government, as well as who will serve in its Cabinet. Former European Central Bank Vice President Lucas Papademos is the front runner for the role of new prime minister but the Harvard professor was reportedly not in Greece last night. The next prime minister?s main tasks will be to regain the trust of Greece?s eurozone partners so Athens can secure the sixth loan tranche from its first bailout. If Greece does not receive this 8 billion euros by around the middle of December, it faces a disorderly default. The new premier will also have to oversee negotiations for the new bailout. The measures demanded from the eurozone and the International Monetary Fund will be a sensitive political issue due to the dire state of the Greek economy and the impact this is having on most citizens.

An opinion poll conducted by Public Issue for Sunday?s Kathimerini indicated that despite the current problems, the majority of Greeks want to remain in the eurozone. The survey indicated that if Papandreou were to have forged ahead with plans to hold a referendum on whether Greece should stay or leave the euro, most Greeks would have voted for remaining in the eurozone. According to the poll, 68 percent of the 603 people questioned said they would have voted to keep the euro.

However, Papandreou would have had a much harder task convincing Greeks to support the new bailout agreed with its eurozone partners on October 26. Only 31 percent of respondents said they would have voted for the terms of the deal, which would include more austerity measures, while 46 percent said they would have voted against the deal. The rest were undecided or would have cast a blank ballot.

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