Greek Prime Minister George Papandreou late yesterday agreed to step down and political leaders are meeting today to form a new unity government to end the political crisis, the President’s office said.
The deal was reached after a meeting lasting nearly two hours between Mr Papandreou, main opposition leader Antonis Samaras and President Carolos Papoulias, the Greek head of state.
“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 on October 26,” the President’s office said in a statement.
This is a reference to a hard-fought EU deal reducing Greece’s monster debt by nearly a third that had been placed in jeopardy by the political uncertainty in Athens, with European leaders threatening to withhold loan funds shielding the country from a looming bankruptcy.
“Prime Minister George Papandreou has already stated that he will not lead the new government,” the President’s statement added.
Mr Samaras had demanded Mr Papandreou’s resignation and early elections as a condition for granting the support of his conservative New Democracy party, which enjoys a large lead over the ruling socialist Pasok party in the polls. Mr Papandreou had cautioned against holding elections at this stage, pointing out that both main parties have been weakened after two years of economic crisis and painful austerity, and that no clear victor is likely to emerge.
The conservatives are blamed for ramping up huge deficits in their five years in power until 2009 while the socialists are hated for inviting the International Monetary Fund to rescue the country and ordering two years of breakneck austerity.
The Communist party, Greece’s third-largest, immediately announced they would boycott today’s talks. The leftist Syriza party, ranked fifth in Parliament, also said they wanted no part in the talks, which they said were “borderline as far as the Constitution is concerned” as the new government would not emerge from elections.
European leaders are increasingly frustrated at the political bickering in Athens when they want to press on with urgently needed agreements on tackling the eurozone debt crisis.
Polls published in the Sunday newspapers show that the Greek people are largely in favour of a unity government and want to keep the euro.