AFP Updated November 7, 2011, 11:28 am
•Greek PM steps down
Greek leaders have clinched a historic deal to haul the debt-wracked country, and the eurozone, back from disaster.
ATHENS (AFP) - Greek political chiefs were Monday to form a unity government and pick a new leader to keep the country in the eurozone as nervous markets reopen and the bloc meets to contain its debt crisis.
A new prime minister and cabinet will be named after talks between outgoing Prime Minister George Papandreou and the conservative head of the opposition Antonis Samaras, a government spokesman said.
A historic power-sharing deal was reached in dramatic late-night talks Sunday after Papandreou crucially agreed to step down, removing a key stumbling block hours before jittery financial markets reopen Monday with the euro in the line of fire.
However, an earlier bid to include smaller parties in negotiations foundered after Communists and the leftist Syriza party declined to attend proposed talks.
Asian stock markets were lower in early trade Monday, with Tokyo's Nikkei index down 0.45 percent and Sydney's S&P/ASX 200 off 0.13 percent. The euro was marginally down, buying $1.3777 from $1.3788 in New York late Friday.
The Greek accord came just ahead of a key eurozone finance ministers meeting on Monday to discuss whether to release an eight billion euro ($11 billion) slice of bailout cash that Finance Minister Evangelos Venizelos says is needed by December 15 to keep the country afloat.
"An agreement was reached to form a new government to immediately lead the country to elections after ratifying the decisions taken by the European Council," the Greek president's office said in a statement.
"Tomorrow there will be a new communication between the prime minister and the head of the opposition on the new prime minister and the new government."
Leftist Eleftherotypia daily dismissed the power-sharing deal as a "memorandum miscarriage", referring to the loan agreement in 2010 between Greece and the EU, the IMF and the European Central Bank that spawned two years of tough austerity.
And Avgi, mouthpiece of the Syriza party, decried a "cooked-up deal to save the memorandum."
Senior economic officials from the government and the opposition conservatives were to hold follow-up talks early on Monday morning, ahead of the eurozone meeting in Brussels, the semi-state Athens News Agency said.
European leaders had become increasingly frustrated at the political impasse in Athens at a time when they want to press ahead with hard-won agreements reached in late October on tackling the eurozone debt crisis.
Polls published in Sunday newspapers showed Greeks largely in favour of a unity government and also wanting to keep the euro, but the country's EU peers had made clear that they were fed up with the agony and required a clear message -- was Greece to remain in the eurozone or not?
Despite the historic deal, there will likely be no let-up in the pressure on Athens to implement stinging austerity measures in return for the cash payment, available under the first May 2010 Greek bailout package.
The new government will be tasked with implementing the terms of an October EU bailout deal that calls for further harsh austerity measures on Greece, already at breaking point due to a shrinking economy and rapidly rising unemployment.
The talks had become bogged down for almost two days in a dangerous game of brinkmanship, with Samaras insisting on immediate elections, which Papandreou resisted as too risky.
The damaging political stalemate threatened to see the country run out of cash within weeks.
Sunday's dramatic events capped a week that has been tumultuous even by the recent standards of Greece, which finds itself trapped in the eye of the eurozone debt storm.
Papandreou set the ball rolling last Monday with a shock announcement that Greece would hold a referendum on the terms of the bailout.
The move stunned fellow European leaders, sent global markets into a tailspin and earned him a humiliating dressing-down at a G20 summit in France. Papandreou hastily retracted the proposal.
The Greek people, meanwhile, battered by two years of stringent austerity measures that have crippled the economy and sent unemployment soaring, appear to have had more than enough of their squabbling leaders.
"A unity government with whom? With the same people? We will have the same results," said Marianna, a shopkeeper.
"Papandreou. Samaras. They are all the same," said Takis Karalambos, as he sipped coffee outside a market in Athens.
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