Greek rivals seek road to solvency

Greece’s president convened crisis talks between the country’s embattled prime minister and the head of the conservative opposition last night in an effort to hammer out a solution on forming an interim government and ending a political crisis that threatens the country’s solvency and cherished eurozone membership.

President Karolos Papoulias was hosting the meeting between prime minister George Papandreou and the head of the main opposition conservatives, Antonis Samaras, after two days of political wrangling.

Faced with mounting pressure from both the opposition and his own lawmakers, Mr Papandreou has said he will step aside if agreement can be reached on the formation of an interim government that will secure a new European debt deal for Greece and the disbursement of a vital bail-out loan instalment without which the country will default within weeks. He survived a confidence vote in his government late on Friday.

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“I’ve said many times, and I insist on this for the umpteenth time, that I am not interested in staying on in this new government as prime minister,” Mr Papandreou told his ministers during an emergency Cabinet meeting yesterday, before his talks with Mr Samaras and Mr Papoulias. “I couldn’t have been clearer. I don’t play games and neither do I gamble the country’s fortunes.”

Mr Samaras, who has been pressing for snap elections, has set Mr Papandreou’s resignation as a condition for participating in any talks, saying earlier yesterday he considered the prime minister to be “dangerous” for the country.

The crisis was sparked after Mr Papandreou’s shock announcement on October 31 that he wanted to put a new European debt deal aimed at rescuing his country’s economy to a referendum.

That plan caused an uproar in Europe, with the leaders of France and Germany saying any popular vote in Greece would decide whether the country would remain in the euro.

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European officials also said the country would not receive the vital eight billion euro instalment of its existing 110 billion bail-out until the uncertainty in Athens was over.

Mr Papandreou’s announcement also spooked international markets, leading stock markets to tumble and led to calls in Greece for Mr Papandreou’s resignation –even from among his own Socialist lawmakers and ministers – with many saying he had endangered Greece’s bail-out.

The prime minister withdrew the referendum plan on Thursday, after Mr Samaras indicated his party would back the new debt deal, which was agreed after marathon negotiations in Europe on October 27.

Greek officials are hoping to have a deal on a new interim government by today, when the country has to attend a meeting of eurozone finance ministers in Brussels.

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Mr Papandreou said during the Cabinet meeting: “Forming a new government is not just a question of having someone representing the country.

“There are very specific things to be done and we must show responsibility and send a strong message to our partners abroad that we, as a country, are ready not only to vote the agreement, but also to implement it.”

Greece has been surviving since May 2010 on its initial bail-out. But its financial crisis was so severe that a second rescue was needed as the country remained locked out of international bond markets by sky-high interest rates and facing an unsustainable national debt increase.

Prime minister Francois Fillon has warned the French that belts must tighten next year to reduce the debt.

He said the 2012 budget “will be one of the most rigorous France has known since 1945”, the end of the Second World War.

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