Initial agreement reached in Greece power-sharing 

 

Greece's embattled prime minister and main opposition leader agreed tonight to form an interim government to ensure the country's new European debt deal and oversee early elections, capping a week of political turmoil that saw Greece facing a catastrophic default and threatening its euro membership. 

Greek leaders had been anxious to end a severe political crisis with some positive result before tomorrow, when the country heads to a meeting of eurozone finance ministers in Brussels. The initial agreement, which will see Prime Minister George Papandreou step down, came after a week of drama sparked by his announcement he was taking the debt deal to a referendum. He withdrew that plan on Thursday after intense opposition from European leaders and his own Socialist lawmakers, many of whom called for him to resign. 

Papandreou "has already stated he will not lead the new government," the statement from the president's office said. 

He is to meet again tomorrow with opposition leader Antonis Samaras to seek agreement on who will head the new government and who will be included in its Cabinet, the president's office said. 

A planned meeting with the leaders of all political parties represented in parliament, which was to take place tomorrow evening, was canceled after parliament's two leftist parties refused to attend, the office said. 

The statement came after a late-night meeting between Papandreou and Samaras called by President Karolos Papoulias to end a two-day deadlock. Direct talks had failed to get off the ground as Papandreou had agreed to step aside but only after power-sharing talks settled on a new government makeup, and Samaras insisted he wanted snap elections and would not start negotiations unless Papandreou resigned first. 

An opposition conservative party official said Samaras' party is "absolutely satisfied" with the outcome of the talks and that party officials were to hold meetings late Sunday night with Finance Minister Evangelos Venizelos and his advisers to discuss how long it would take to finalize the new debt deal and when elections could be held. 

"Our two targets, for Mr. Papandreou to resign and for elections to be held, have been met," the official said, speaking on condition of anonymity to discuss the process. 

The crisis was sparked after Papandreou's shock announcement on October 31 that he wanted to put a new European debt deal aimed at rescuing his country's economy to a referendum. That plan caused an uproar in Europe, with the leaders of France and Germany saying any popular vote in Greece would decide whether the country would remain in the euro. European officials also said the country would not receive the vital €8 billion euro installment of its existing €110 billion bailout until the uncertainty in Athens was over. 

Papandreou's announcement also spooked international markets, leading stock markets to tumble and led to calls in Greece for Papandreou's resignation — even from among his own Socialist lawmakers and ministers — with many saying he had endangered Greece's bailout. 

The prime minister withdrew the referendum plan on Thursday, after Samaras indicated his party would back the new debt deal, which was agreed upon after marathon negotiations in Europe on October 27. 

Greece has been surviving since May 2010 on its initial bailout. But its financial crisis was so severe that a second rescue was needed as the country remained locked out of international bond markets by sky-high interest rates and facing an unsustainable national debt increase. 

The new European deal, agreed on by the 27-nation bloc on October 27 after marathon negotiations, would give Greece an additional €130 billion (£111 billion) in rescue loans and bank support. It would also see banks write off 50 percent of Greek debt, worth some €100 billion (£86 billion). The goal is to reduce Greece's debts to the point where the country is able to handle its finances without relying on constant bailouts. 

Greece's lawmakers must now approve the new rescue deal, putting intense pressure on the country's leaders to swiftly end the political crisis so parliament can convene and put the debt agreement to a vote. 

"We know that there can be no elections now," Papandreou had said during an earlier emergency Cabinet meeting, noting that snap polls would delay the approval of the new debt deal. "This cooperation, however, is necessary and will be beneficial for the climate in our country and internationally." 

In return for bailout money, Greece was forced to embark on a punishing program of tax increases and cuts in pensions and salaries that sent Papandreou's popularity plummeting and his majority in parliament whittled down from a comfortable 10 seats to just three.  AP

Start your day with The Independent, sign up for daily news emails
Voices
voices
News
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
News
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
news
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Recruitment Consultant / Account Manager - Surrey / SW London

£40000 per annum + realistic targets: Ashdown Group: A thriving recruitment co...

Ashdown Group: Part-time Payroll Officer - Yorkshire - Professional Services

£25000 per annum: Ashdown Group: A successful professional services firm is lo...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before