Greek premier George Papandreou is to step down as part of a deal to form a unity government. His expected departure broke a deadlock in talks after the EU demanded Greece’s parties join forces to avert bankruptcy.
It is not clear who will lead the interim administration – those discussions will continue today – but whatever the make-up of the new government, it will be charged with getting a euro zone bailout approved.
Papandreou and the opposition leader Antonis Samaras also agreed that while the new government could be sworn in and a vote of confidence held within a week, February 19 would be the date for fresh elections.
Samaras is one of several candidates to lead the interim unity government although Lukas Papademos, a former European Central bank vice president, is now being suggested as another possible leader.
Although details still have to be worked out, it’s hoped at least a modicum of confidence can be restored. Political stability is needed before lenders will provide more loans.
Unless it can secure more funding, Greece is set to run out of cash by the middle of December.