ATHENS (AP) — Greece will get a new prime minister later Tuesday, a senior government official said, as the country’s European partners ratcheted up the pressure for a swift resolution to the political crisis.
Talks between current Prime Minister George Papandreou and opposition leader Antonis Samaras have dragged into a second day as they try to hammer out a power-sharing deal. The two agreed over the weekend to forge an interim government that will shepherd the country’s new 130-billion-euro ($179 billion) European rescue package through Parliament.
Without the deal, agreed less than two weeks ago, Greece would go bankrupt, potentially wrecking Europe’s banking system and sending the global economy back into recession.
As yet, there are no precise details of when the new interim prime minister will be announced, but the pressure is rising on Greek politicians to make decisions soon.
A senior government official said Greece’s eurozone partners are demanding that five top Greek officials co-sign a letter reaffirming their commitment to the country’s bailout deals and economic reforms, in return for the release of a vital 8-billion-euro ($11 billion) loan installment later this month. He said those officials are Mr. Papandreou and Mr. Samaras, the Bank of Greece governor, the new prime minister and the new finance minister.
Earlier, the country’s ministers offered their resignations to Mr. Papandreou to pave the way for the creation of the interim government, which is expected to last only until Feb. 19.
“We have made our resignation available to the prime minister in order to help him with his actions,” Tourism Minister George Nikitiadis said. “My feeling is that tonight we will have a name (of the new premier). It’s going well.”
Deputy Education Minister Evi Christophilopoulou echoed the sentiment, saying: “We are very close to forming a coalition government. This is very important for the stability of the country.”
The political crisis erupted last week, when Mr. Papandreou said he would put the new European rescue package to a referendum and the country’s international creditors froze the payment of the next installment from Greece’s previously approved loans.
Mr. Papandreou withdrew the plan Thursday after Mr. Samaras indicated he would back the new deal. But frustrated with the political turmoil in Greece, the international creditors have maintained the pressure even after the public vote idea was officially canceled.
Mr. Papandreou and Mr. Samaras reached a landmark agreement late Sunday for Mr. Papandreou to step down and the temporary government to be formed. The new prime minister would serve until an early election is held next year, with the most likely date being Feb. 19, the Finance Ministry has said.
The two main candidates being considered as interim premier are former European Central Bank Vice President Lucas Papademos and European Ombudsman Nikiforos Diamantouros, officials with knowledge of the negotiations told the Associated Press. They asked not to be identified, citing the sensitivity of the talks.
None of the people being considered has been announced publicly.
“What’s happening is unbelievable,” said Dora Bakoyannis, a former foreign minister and conservative party lawmaker who was expelled from the party for breaking ranks and voting in favor of an earlier austerity plan. She has now formed her own party.
“The country cannot take these petty political games any longer. … What are they trying to do? Save their skin? But if the whole country goes down, who’s skin will be saved?” she said on Greece’s Skai television.
“The problem is not finding serious candidates, but whether those candidates will be allowed to do their job and not asked to be puppets.”
Greece has survived since May 2010 on a 110-billion-euro ($150 billion) rescue-loan program from its eurozone partners and the International Monetary Fund, but all agree it’s not enough. A second rescue package has been created that involves private bondholders who have agreed to cancel 50 percent of their Greek debt.
Though Greece has been locked out of long-term bond markets because of excessively-high interest rates, it has maintained a limited present in the market for short-term cash.
It raised 1.3 billion euros ($1.79 billion) in 26-week treasury bill auction Tuesday, with the sale producing a yield of 4.89 percent, only marginally higher than the 4.86 percent interest rate from a similar auction on Oct. 11. Tuesday’s sale was 2.91 times oversubscribed, up on October’s equivalent 2.73.
In return for its bailout cash, Greece has endured 20 months of punishing austerity measures. The efforts by Mr. Papandreou’s government to keep the country solvent have prompted violent protests, crippling strikes and a sharp decline in living standards for most Greeks.
Associated Press writers Elena Becatoros and Nicholas Paphitis in Athens and Costas Kantouris in Thessaloniki, Greece, contributed to this article.
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