Global Politics

Greeks Agree On Coalition Government

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

Beleaguered Prime Minister George Papandreou will step aside and his successor will be chosen at talks in the morning, the statement said.

He and main opposition leader Antonis Samaras attended the talks, hosted by President Karolos Papoulias.

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

Once the new leader has been named, the president will invite all parties to join the new government, the statement said.

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

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 Finance Minister Evangelos Venizelos.

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

A fresh bailout deal was agreed by the European Union last month, but 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 bailout deal has still not been ratified by Greece, and the EU says no more funds will be released until it has been.

It gives the government 130 billion euros ($178 billion) and imposes a 50 percent 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 Papandreou.

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

Saturday
Greek Prime Minister George Papandreou is facing a major challenge in his efforts to deal with the country's debt crisis.

He has been in talks with President Carolos Papoulias on forming a government of national unity to ratify a vital eurozone bailout deal.

But the main opposition party has said it would not join a coalition under Papandreou and has demanded elections.

It comes after Papandreou's ruling Socialist (Pasok) party narrowly won a confidence vote on Friday night.

As he entered Saturday's brief meeting at the presidential palace, Papandreou said government cooperation was "necessary to guarantee — for Greece and for our partners — that we can honor our commitments."

"I am concerned that a lack of cooperation could trouble how our partners see our will and desire to remain in the central core of the European Union and the euro."

As he left after about an hour, he said the process of forming a coalition government would begin soon, but few other details emerged.

The prime minister has been fighting for his political life in the past week, facing calls for his resignation even from within his own party.

Earlier this week he shocked EU partners and sent markets into turmoil after calling for a referendum on the hard-fought EU deal struck last month to great fanfare.

The referendum plan was abandoned, but the BBC's Mark Lowen in Athens says it is looking increasingly unlikely that Papandreou will lead a future coalition.

Reports are emerging that Finance Minister Evangelos Venizelos could replace him as interim prime minister. Venizelos has said elections could be held once procedures for securing the EU bailout package were finished.

New Democracy party leader Antonis Samaras has already dismissed the prime minister's idea of a coalition government, saying Papandreou had rejected his proposals.

"The responsibility he bears is huge," he said. "The only solution is elections."

The late-night confidence vote — timed to take place when markets in Europe and the US were closed — was on a knife-edge, but the government eventually won with 153 votes to 145.

During the hours of debate, Papandreou said the bailout deal currently on offer by the EU had to be accepted, and it would be "historically irresponsible" to lose it.

Immediate elections would be "catastrophic" for the deal, he said, so proposed a new, broad coalition to take charge until it had been agreed.

"I therefore ask for a vote of confidence in order to ensure the security of this nation."

Hinting that he might stand aside, he said he would not put personal ambition before saving the country.

"I am not interested in any post, the last thing I am interested in is whether I am re-elected," he said.

Friday 7:30 p.m.
Greece's Prime Minister George Papandreou has won a crucial confidence vote after promising to hold power-sharing talks.

In an address to parliament before the vote he ruled out snap elections, saying they would be "catastrophic".

He said he did not care about his post and the leadership of any government of national unity would be negotiable.

Papandreou previously shocked EU partners and sent markets into turmoil after calling for a referendum on an EU deal to bail out debt-ridden Greece.

The finance minister confirmed on Friday the referendum had now been scrapped.

Papandreou said the bail-out deal currently on offer by the EU had to be accepted, and it would be "historically irresponsible" to lose it.

He said immediate elections would be "catastrophic" for the deal, so proposed a new coalition to take charge until it had been agreed.

"I have been in contact with the president and I will visit him tomorrow (Saturday) to inform him of my intentions and that I am moving forward with all the parties for a broader coalition government, and to agree on common goals, a timeframe and people, to agree on its composition and even the head of this coalition," he said.

"I therefore ask for a vote of confidence in order to ensure the security of this nation."

In Athens, thousands of protesters have gathered in Syntagma Square for the vote, and security has been tightened around the nearby parliament building.

The vote took place after several hours' debate. Papandreou addressed parliament for more than half an hour.

Eurozone leaders fear that failure to solve the Greek debt crisis could risk it spreading to other vulnerable economies, particularly Italy.

Germany had said a referendum would essentially be a vote on whether Greece wanted to be part of the EU and that the stability of the eurozone was more important than Greek membership.
(Recorded at 4pm EDT) Anchor Lisa Mullins talks to the BBC's Mark Lowen in Athens about the latest on the Greek government crisis.