Parties agree to build government in Greece

November 7, 2011 at 12:00a.m.

McClatchy Newspapers

ATHENS

Conservatives and socialists have agreed to build a transitional government to lead Greece out of its economic crisis. President Karolos Papoulias’s office said Sunday.

The transition government is to include the country’s two largest parties — the Panhellenic Socialist Movement (PASOK) and the conservative New Democracy party. Its major mission will be implementing the European Union’s program adopted on Oct. 26.

Elections are to be held after the implementation is in place.

Papoulias, who has brokered the agreement, is to meet on Monday with political leaders to clarify which other parties will participate in the transitional government.

It appeared that Prime Minister George Papandreou, who has been fighting for political survival over austerity measures demanded by the EU, would not lead the new government.

Representatives of Papandreou and the conservative opposition leader, Antonis Samaras, were expected to meet through the night and on Monday to agree on the makeup of the new government, when the name of the new prime minister is to be announced.

Greek media said Lucas Papademos, former vice president of the European Central Bank, is a likely candidate.

The transitional government is to push through with a broad majority in parliament the measures to keep Greece out of bankruptcy — the condition for fresh capital from the international community. Without such measures, bankruptcy could be declared as soon as December.

Papoulias pushed hard for the agreement on a new government, and finally brought Papandreou and Samaras together Sunday evening.

Papandreou announced Saturday that he would negotiate with opposition parties to form a broad-based government, after narrowly winning a parliamentary vote of confidence.

Until Sunday, Samaras had refused to join a coalition with Papandreou. After his meeting with Papoulias, the repeated his his call for the prime minister’s resignation and snap elections.

The international bailout agreed to in October would give the country $180 billion and calls for a voluntary writeoff of 50 percent by private holders of Greek debt, in return for years of unpopular austerity measures.