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Greece agrees unity government with new PM to be chosen today

Changes afoot in the debt stricken country.

Papandreou, left, president Papoulias, centre, and opposition leader Samaras sit at the Presidential Palace in Athens on Sunday.
Papandreou, left, president Papoulias, centre, and opposition leader Samaras sit at the Presidential Palace in Athens on Sunday.
Image: KOSTAS TSIRONIS/AP/Press Association Images

GREEK LEADERS HAVE agreed on a new national unity government that will be headed by a new interim prime minister.

The office of the Greek president has confirmed that George Papandreou is to step down following a week of uncertainty sparked by his decision to hold a referendum on the country’s second EU-IMF bailout, an idea which was later scrapped.

A new unity government will lead the country until elections which will likely take place in February, BBC News reports.

The agreement followed a meeting between Papandreou, opposition leader Antonis Samaras and the country’s president Karolos Papoulias in the Greek capital yesterday evening.

With the new government unlikely to be formed and a new prime minister in place until some point later today the markets are braced for more volatility when they open this morning, the Guardian reports.

The agreement came following two hours of meetings at the presidential palace in Athens and was, the paper says, the first real signs of progress and a breakthrough following political deadlock which has gripped not only Greece but the entire eurozone for the past week.

Papandreou’s resignation had been expected over the weekend but there had been similar expectations at one point last week before he resolutely vowed to fight on.

He survived a confidence vote on Friday but his position became untenable amid calls from Samaras for him to step down immediately.

BBC News goes on to report that the two men, once former roommates at university, sharply disagreed over the timing of new elections which Papandreou - leader of the socialist Papos party – wanted to delay for several months while Samaras - leader of the conservative New Democracy party – wanted them immediately.

Among the favourites to replace Papandreou as the head of the new interim government is Finance Minister Evangelos Venizelos, who launched an extraordinary broadside at his prime minister last week.

Also in contention is Lukas Papademos, a former vice president of the European Central Bank and one-time favourite to take over as finance minister prior to Venizelos being installed earlier this year.

Read: Noonan in Brussels for eurozone summit >

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Hugh O'Connell

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