Greece was poised on Tuesday to announce an interim government and end a crisis of confidence that threatens to derail a 100bn euro bailout agreement crucial to the eurozone's survival. The country's political leaders had said they would make the announcement on Monday, but talks dragged into a third day amid disagreements over who would lead the government.
Socialist prime minister George Papandreou and conservative opposition leader Antonis Samaras met for almost 90 minutes under the auspices of the country's president. A commuinique issued after they broke off negotiations for the night said they would name the caretaker prime minister and cabinet the following day. The new government's agenda would be the ratification of a 100bn euro bailout for Greece which the eurozone approved last week, and the implementation of an austerity programme attached to that bailout. It would then take the country "immediately" to a new general election, the communique said.
Papandreou has said that he will be stepping down as prime minister in order to facilitate the formation of such a government. His resignation has been the key demand by Samaras, who has reiterated it every day for the past three days. The prime minister's brother, Nick Papandreou, told The New Athenian that George Papandreou took the decision to resign on Friday.
Papandreou told his cabinet on Sunday that he would only hand over power to a government committed to the priorities of unfreezing billions of euros from the European Central Bank, European Commission and International Monetary Fund, stemming from Greece's existing bailout package; ratifying the second bailout which includes a 50% writedown of bond values in private hands; and implementing Greece's obligations stemming from that agreement.Papandreou wants the bailout ratified by a three fifths majority in parliament, which will require opposition support.
It was Papandreou's unwillingness to risk a bipartisan vote in an increasingly polarised legislature that led him to opt for a January referendum to ratify the bailout instead. His announcement last Monday unleashed a storm of criticism. New Democracy led the charge, saying that Greece's memberhsip of the euro was itself at stake, and a referendum was too unpredictable a vehicle to gamble the country's future on.
Pasok MP Milena Apostolaki declared herself independent on Tuesday, and Eva Kaili followed suit on Thursday. In the meantime, eurozone leaders France and Germany upbraided Papanredou on the sidelines of a G20 summit in Cannes, and challenged him to decide whether Greece wanted to be in the eurozone or not. His Finance Minister, who accompanied him, was so shaken by the experience that he broke ranks with the cabinet, which had initially aligned itself with Papandreou's referendum idea, and split the government.
By Friday, the day of a confidence motion in parliament Papandreou had called, he was within two MPs of losing his governing majority in parliament and his cabinet was divided. On Friday evening he told parliament that if he received a vote of confidence he would be willing to resign and form a national unity government.
Sunday night's communique suggests that Samaras prevailed upon Papandreou to hold the election sooner rather than later. Papandreou had, before the meeting, placed the election nearer to March 2012.
Outlook
A caretaker government would have to be approved by an absolute majority of the 244 MPs in the socialist and conservative camps. Not enjoying a popular mandate, it would draw its legitimacy from these two main parties, which have traded power between them since 1974. But popular support for the two party system has waned in recent years, suggesting that collaboration may be necessary after an election as well.
Many observers questioned whether a caretaker government made up of technocrats would be able to run the government even for very long, given how recalcitrant many labour groups have become in the public sector after a year of austerity measures.
Socialist prime minister George Papandreou and conservative opposition leader Antonis Samaras met for almost 90 minutes under the auspices of the country's president. A commuinique issued after they broke off negotiations for the night said they would name the caretaker prime minister and cabinet the following day. The new government's agenda would be the ratification of a 100bn euro bailout for Greece which the eurozone approved last week, and the implementation of an austerity programme attached to that bailout. It would then take the country "immediately" to a new general election, the communique said.
Papandreou has said that he will be stepping down as prime minister in order to facilitate the formation of such a government. His resignation has been the key demand by Samaras, who has reiterated it every day for the past three days. The prime minister's brother, Nick Papandreou, told The New Athenian that George Papandreou took the decision to resign on Friday.
Papandreou told his cabinet on Sunday that he would only hand over power to a government committed to the priorities of unfreezing billions of euros from the European Central Bank, European Commission and International Monetary Fund, stemming from Greece's existing bailout package; ratifying the second bailout which includes a 50% writedown of bond values in private hands; and implementing Greece's obligations stemming from that agreement.Papandreou wants the bailout ratified by a three fifths majority in parliament, which will require opposition support.
It was Papandreou's unwillingness to risk a bipartisan vote in an increasingly polarised legislature that led him to opt for a January referendum to ratify the bailout instead. His announcement last Monday unleashed a storm of criticism. New Democracy led the charge, saying that Greece's memberhsip of the euro was itself at stake, and a referendum was too unpredictable a vehicle to gamble the country's future on.
Pasok MP Milena Apostolaki declared herself independent on Tuesday, and Eva Kaili followed suit on Thursday. In the meantime, eurozone leaders France and Germany upbraided Papanredou on the sidelines of a G20 summit in Cannes, and challenged him to decide whether Greece wanted to be in the eurozone or not. His Finance Minister, who accompanied him, was so shaken by the experience that he broke ranks with the cabinet, which had initially aligned itself with Papandreou's referendum idea, and split the government.
By Friday, the day of a confidence motion in parliament Papandreou had called, he was within two MPs of losing his governing majority in parliament and his cabinet was divided. On Friday evening he told parliament that if he received a vote of confidence he would be willing to resign and form a national unity government.
Sunday night's communique suggests that Samaras prevailed upon Papandreou to hold the election sooner rather than later. Papandreou had, before the meeting, placed the election nearer to March 2012.
Outlook
A caretaker government would have to be approved by an absolute majority of the 244 MPs in the socialist and conservative camps. Not enjoying a popular mandate, it would draw its legitimacy from these two main parties, which have traded power between them since 1974. But popular support for the two party system has waned in recent years, suggesting that collaboration may be necessary after an election as well.
Many observers questioned whether a caretaker government made up of technocrats would be able to run the government even for very long, given how recalcitrant many labour groups have become in the public sector after a year of austerity measures.
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