Greek Pm Looks To Form Coalition
November 7, 2011 by staff
Greek Pm Looks To Form Coalition, Greek Prime Minister George Papandreou and opposition leader Antonis Samaras have agreed to form a new coalition government that could save the country’s European Union bailout plan.
President Karolos Papoulias organized the 90-minute meeting. His office later said talks will continue Monday to decide who will form the new Cabinet.
Sunday’s meeting marked the first step toward breaking the political impasse that has hamstrung a country that is facing bankruptcy — perhaps as soon as the end of the month.
For two days Papandreou and Samaras had wrangled through the media: the prime minister offering to step down once a coalition government was formed, and the opposition leader adamantly refusing to discuss a coalition until the prime minister resigned.
The interim government is expected to be in place for about three to four months in order to ensure a new European debt deal and secure a vital installment of bailout loans that Greece needs to avoid default.
Greece has been surviving for the past 18 months on a 110-billion euro ($152 billion) bailout from the eurozone countries. But its financial crisis was so severe that it now requires a new and bigger deal, agreed on by the 27-nation bloc on Oct. 27 after marathon negotiations, would give Greece an additional 130 billion euros ($179 billion) in rescue loans and bank support. It would also see banks write off 50 per cent of Greek debt, worth some 100 billion euros ($138 billion).
With the new rescue deal hanging in the balance, there is intense pressure on the country’s leaders to convene parliament and put the debt agreement to a vote.
In return for bailout money, Greece was forced to embark on a punishing program of tax hikes 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 two.
Papandreou’s government came under renewed threat after his disastrous bid this past week to hold a public referendum on the new deal.
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