News / Europe

Greek Prime Minister to Step Down, Unity Government to be Formed

Greece's Prime Minister George Papandreou waves to journalists while exiting the Presidential Palace after a meeting with Greek President Karolos Papoulias and opposition leader Antonis Samaras, in Athens Sunday, Nov. 6 2011.
Greece's Prime Minister George Papandreou waves to journalists while exiting the Presidential Palace after a meeting with Greek President Karolos Papoulias and opposition leader Antonis Samaras, in Athens Sunday, Nov. 6 2011.

Political leaders in Greece reached an agreement Sunday night to form a new unity government, a move that will allow the debt-ridden country to secure a European Union bailout.

In an effort to break the political deadlock, Greek President Karolos Papoulias hosted late, closed-door talks between Prime Minister George Papandreou and opposition leader Antonis Samaras.

Throngs of reporters outside the gates of the presidential palace in Athens were on hand when word came a few hours later.

Greek Prime Minister Papandreou took power in 2009 with promises to create jobs, help the poor and pump life into a sagging economy. Instead, he found himself fighting to keep the country from sinking into bankruptcy and taking the entire global economy down with it.

Mr. Papandreou's grandfather, George, and his father Andreas, also were Greek prime ministers who helped shape contemporary Greek history.

The current prime minister was born in 1952 in the midwestern U.S. city of St. Paul, Minnesota. Andreas Papandreou had fled there to escape a severe right-wing Greek dictatorship in the late 1930s.

George Papandreou studied in the United States, Canada and Sweden before moving to Greece when democracy returned in 1974. He followed his family into the Socialist Party, winning a seat in parliament and holding several government posts, including foreign minister and party leader.

He became prime minister when the Socialists won the 2009 parliamentary elections.

Reporters from Greek national media read the statement from the president's office.

The statement said Mr. Papandreou and New Democracy party leader Antonis Samaras had reached a preliminary agreement to form an interim government, and that Mr. Papandreou will not lead the new government.

The statement added that the two men are expected to meet again on Monday to discuss details of the plan, including who will lead the government to early elections.

Earlier Sunday, Samaras said the prime minister had to step aside. "He [i.e., Mr. Papandreou] is obstructing any solution.  And if he does not resign, he does not allow the constitution to operate properly.  So if he does resign, then things will go as they have to," he said.

Mr. Papandreou agreed to step aside as long as Athens could secure a loan that would help Greece avoid bankruptcy.  The nation's finance minister has said Greece needs $11 billion in bailout funds in the coming weeks to stay afloat.

Greek reaction to Sunday's developments are mixed.

A 22-year-old Athens man said he is not optimistic about his country's future, while a 33-year-old woman said she is hopeful about the political agreement. "Yes, I do feel positive.  If they finally did it, then I do feel positive because the country has to be represented in a unanimous way," she said.

The interim government is expected to get the Greek parliament and cabinet to accept the terms of a new European Union agreement, which requires Greece to raise taxes and make deeper cuts in government spending.

Late last month, Eurozone nations agreed to provide Greece with additional loans.  Mr. Papandreou then announced that he wanted to put the debt deal to a referendum.  He later withdrew the plan.

Eurozone finance ministers are set to meet in Brussels on Monday to discuss plans to release billions of dollars in bailout funds to Greece.

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