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Greek leaders haggle over details of new unity government

Greece's main parties have been hammering out an agreement on a coalition to guide the country through its present financial troubles. The naming of a successor to Premier George Papandreou is expected imminently.

Greek Acropolis

Greece needs to implement reforms to ward off bankruptcy

Greece's Socialist (PASOK) party and the conservative New Democracy party are due to name a successor to Prime Minister George Papandreou imminently, following talks to shape a "100-day coalition."

Papandreou is due to resign once an agreement has been reached.

Former European Central Bank Vice President Lucas Papademos and European Ombudsman Nikiforos Diamantouros were among the frontrunners understood to be under consideration to lead the country through its immediate financial woes.

The new premier is scheduled to serve until a general election in February.

One opposition source was reported by the news agency Reuters as saying that Finance Minister Evangelos Venizelos - also muted as a possible premier - would remain in his current post for the purposes of continuity. However, the same source said that no decision had yet been made on the top government job.

Antonis Samaras, left, speaks with Greek President Karolos Papoulias

Samaras (left) met with Papoulias on Sunday

Papademos is a member of the ruling party, while Diamantouros is a political academic.

The new unity government will be tasked with implementing the economic reforms demanded by international partners in return for Greece's emergency loans. So far, the only certainty is that Papandreou will not be at the helm.

Greece's European Union partners have pushed for a crisis coalition and demanded progress on support for the bailout deal. Papandreou shook the confidence of the EU with his announcement on October 31 that he would call a referendum on the package. The prime minister abandoned the idea under pressure from France and Germany as well as members of his own governing coalition.

Rösler outlines options for Athens

German Economics Minister Philipp Rösler said in an interview published in Monday's edition of the mass-circulation daily Bild that the goal remained to keep all 17 members - including Greece - inside the eurozone. He also said, however, that this would only be possible if Athens toed the line.

"The Greeks have the choice: [implement] reforms within the eurozone, or leave without the reforms," Rösler told the paper. "There is no third way."

Protests in central Athens

Greeks are outraged over the proposed measures

The economics minister said there could be no delays in the reform process, even though many of the austerity measures - including tax increases and pension cuts - are deeply unpopular with the public. Asked if Greek resistence to the cuts was ungrateful, Rösler said: "The Greek government must at least understand that our patience will run out eventually."

The preconditions are part of the bailout package approved at an EU summit on October 27. While the package provides Greece with another 130 billion euros ($180 billion) of rescue money and a 50 percent write-off on obligations to private creditors, it also requires Athens to implement another round of deeply unpopular austerity measures that include tax increases and pension cuts.

Greece has already undergone several rounds of austerity measures as the country's economy contracts and unemployment rises. But Papandreou said approval of the latest bailout package, including the cuts, is critical for Greece's future.

"The application of this deal is the precondition for us staying in the eurozone," the prime minister said after meeting with President Papoulias on Saturday. "It's as important as that."

Drachma drama

Greek Finance Minister Evangelos Venizelos

Venizelos was expected to remain in post as finance minister

Meanwhile, the Greek public is increasingly aware that the longer it takes to solve the political turmoil, the less patience the international community will have. One Greek newspaper likened the political arguing to "haggling on board the Titanic."

Should Athens fail to accept the bailout agreement's conditions, Greece could be booted out of the eurozone and return to its former currency, the drachma.

Sixty-seven percent of Greeks believe life would be worse if they were forced to abandon the euro, according to a survey conducted by the daily newspaper Kathimerini.

Author: Mark Hallam, Richard Connor (AFP, AP, Reuters, dpa)
Editor: Nancy Isenson

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