Coalition talks fail to produce new PM, cabinet

Talks between Prime Minister George Papandreou and New Democracy leader Antonis Samaras aimed at naming a new premier and cabinet to govern Greece over the next few months ended without agreement late on Monday night.

The delay in forming a new government appeared to cause concern in Brussels, where the head of the Eurogroup of finance ministers, Luxembourg?s Jean-Claude Juncker, said that both PASOK and New Democracy would have to provide written commitments to carry out the reforms demanded by Greece?s lenders.

Following a day of intense speculation about who would lead Greece in its upcoming negotiations with its eurozone partners and the International Monetary Fund over the next loan installment Athens is due to receive, as well as a second bailout that would provide 130 billion euros in further loans and a 50 percent haircut for Greek bondholders, the watching world was left none the wiser about who the next prime minister will be.

The front-runner for the position appeared to be former Governor of the Bank of Greece and ex-European Central Bank Vice President Lucas Papademos (photo), but by the afternoon his candidacy seemed to wane. It was rumored that Papademos had asked to pick some members of the cabinet and for the interim government to serve for more than the planned three months but his requests were reportedly rejected by New Democracy, although there was no official confirmation of this.

Other figures that were linked to the position that Papandreou will be vacating were European Ombudsman Nikiforos Diamandouros and former Economy Minister and Greece?s current representative at the International Monetary Fund Panagiotis Roumeliotis. Reports that the latter was flying to Athens from Washington last night were not confirmed.

Evangelos Venizelos, who retains his position as Greece?s finance minister – for the time being at least – met in Brussels on Monday with Economic and Monetary Affairs Commissioner Olli Rehn. Venizelos?s office issued a statement saying that the meeting was ?positive and productive.?

Ahead of the talks, where he was grilled by his counterparts on Greece?s progress in tackling a mounting political and financial crisis, Venizelos sought to put on a brave face. ?After a difficult week, we now have a new political situation, a new political frame, in Greece… This is the proof of our commitment and our national capacity to implement the program and reconstruct our country,? he said.

But Eurogroup head Juncker said he expected no immediate decision on whether Greece would receive its next installment of 8 billion euros in foreign aid without which the country faces default. ?We have some time to discuss this question,? Juncker said.

Later in the day, Juncker said eurozone leaders wanted ?clear commitments? from both of Greece?s main political parties to the terms of a new EU debt deal to secure more loans. ?We asked the new Greek authorities to send a letter, co-signed by the two parties of the incoming government,? he said.