Greek rivals try to cut deal, as EU holds back cash
The outgoing prime minister of Greece tried to hammer out the details of a historic power-sharing deal with the main opposition party leader on Monday to secure a financial rescue package for the desperate country.
Socialist Prime Minister George Papandreou and conservative leader Antonis Samaris held negotiations over the telephone, hours after reaching the landmark agreement to form a coalition for the next 15 weeks.
The new 15-week government's main priority will be passing the new euro130 billion rescue package before elections take place.
Papandreou also phoned EU leaders and German Chancellor Angela Merkel.
"Europe, and the German government too, must be able to see that the Greeks are serious, that it is not just about announcements but about actions," Merkel spokesperson Steffen Seibert said.
No power-sharing deal had been announced by 11 p.m. on Monday in Athens and it wasn't clear if talks with top Greek officials were still underway.
CTV's London Bureau Chief Tom Kennedy said the leaders of the European Union are more concerned that the structure is in place to pass the bailout package, than who leads the interim government.
"Whether it is the finance minister or the former deputy chair of the European Central Bank who heads up this new government they don't really care. I think they see it as a very positive move that this roadmap now is in place in Greece," he told CTV's Canada AM.
Lucas Papademos, the former European Central Bank vice president is being viewed as the most likely new head of the government that would serve until a Feb. 19 general election.
However, it isn't yet clear whether the 64-year-old would want the job.
None of the candidates have been announced publicly.
Papandreou and Samaras agreed late Sunday to the formation of an interim coalition that would pass the bailout measures before an election is held.
The EU bailout plan calls for deep austerity measures within Greece. Papandreou had initially agreed to the deal with EU leaders, then stunned the world by announcing he would take the decision to the Greek people in a referendum.
That announcement caused a week of financial turmoil in the markets with EU leaders saying a referendum would effectively determine whether Greece remained part of the EU and the euro currency.
Papandreou eventually withdrew his proposal for a referendum after the main conservative opposition party agreed in principal to the rescue plan, but his political stock had already taken a serious hit. As part of the deal negotiated Sunday night, he agreed to step down to allow an interim prime minister to take over.
Initially, the conservative opposition had called for an immediate general election in Greece. After the deal was reached Sunday night they conceded they had been under immense pressure from EU officials to withdraw the demand in favour of an interim government, which they did.
Germany's vice chancellor Philipp Roesler warned Greece not to delay in pushing through reforms.
"The Greeks themselves have the choice: reforms in the eurozone or no reforms, and out. There is no third way," he told the popular German daily Bild.
Greece is surviving on a euro110 billion rescue-loan program from eurozone partners and the International Monetary Fund.
Under the terms of the second euro130 billion deal private creditors have agreed to forgive 50 per cent of the debt they are owed by Greece.
In exchange, Greece must accept unpopular austerity measures that are likely to prompt further violent protests, strikes and demonstrations.
"I don't expect anything," Athens resident Stavros Stournaras said for the new political agreement. "When people truly go hungry and there's an uprising, then things will change."
With files from The Associated Press