http://news.yahoo.com/power-sharing-talks-greece-drag-155730246.html11/8/11
Power-sharing talks in Greece drag onATHENS, Greece (AP) — Power-sharing talks between Greece's prime minister and the opposition leader dragged on into Tuesday evening, with senior government officials saying a deal was close and European leaders ratcheting up the pressure for a resolution.
Talks between Prime Minister George Papandreou and opposition leader Antonis Samaras began Monday. The two agreed over the weekend to forge an interim government that will shepherd the country's new euro130 billion ($179 billion) European rescue package through Parliament and end an intense political crisis that threatened Greece's solvency and membership of the euro.
Without the Oct. 27 deal, which took European leaders months to work out, Greece would go bankrupt, potentially wrecking Europe's banking system and sending the global economy back into recession.
"I believe that we are now close to an agreement with New Democracy," Papandreou said during a Cabinet meeting, referring to Samaras' conservative party.
"When one cooperates with another party, there are some red lines on either side which of course restrict things," he said in comments released by his office. "Therefore, while one could imagine ideal situations, in reality these do not exist, and one seeks simply to find the best possible solution."
Senior government officials promised a deal would come by the end of Tuesday, with one government official saying a former vice president of the European Central Bank, Lucas Papademos, was the most likely candidate to replace Papandreou as premier. He spoke on condition of anonymity because no names had officially been made public.
The official said the delay on a public announcement of a deal was mainly due to objections from the opposition party over demands from European officials for written committments by both parties that they supported the new debt deal.
On Monday, eurozone finance ministers said the heads of the two main parties had to commit in writing to the terms of the country's bailouts before Athens can receive a vital euro8 billion ($11 billion) loan installment without which the country faces default within weeks.
"It is indeed essential that a new government will express its explicit and unequivocal commitment in writing concerning all the decisions taken by the 17 euro area member states on Oct. 27," EU economic affairs commissioner Olli Rehn said in Brussels Tuesday.
The next rescue loan installment "can then be disbursed once there is full clarity about Greece sticking to the agreed course and policies," Rehn said. "It should be clear in Athens that solidarity is a two-way street and we expect a united political class to carry out its part of responsibilities."
Samaras, however, appeared to take offense.
"There is national dignity," he said in a statement issued shortly before Rehn's comments. "I have long and repeatedly explained why, in order to protect the Greek economy and the euro, the implementation of the (new European debt deal) has become 'inevitable'. I do not allow anyone to cast doubt on these statements."
His party's spokesman, Yiannis Michelakis, was even blunter, issuing a direct response to Rehn's comments.
"The fact that Europe has lost any trace of trust in the (Socialist) government, does not mean it can insult our national dignity," he said.
Another senior Greek government official said Tuesday that Greece's eurozone partners demanded more — that Papandreou and Samaras, the Bank of Greece governor, the new prime minister and the new finance minister all co-sign a letter reaffirming their commitment to the country's bailout deals and economic reforms.
During an earlier Cabinet meeting, Socialist ministers offered their resignations to Papandreou to pave the way for the creation of the interim government, which is to last until an early election expected Feb. 19.
"We have made our resignation available to the prime minister in order to help him with his actions," Tourism Minister George Nikitiadis said. "My feeling is that tonight we will have a name (of the new premier). It's going well."
The political crisis erupted last week, when Papandreou said he would put the new European rescue package to a referendum. Other eurozone nations were horrified by the delay, markets around the world tanked and Greece's international creditors froze the payment of the next bailout.
Papandreou withdrew the plan Thursday after Samaras indicated he would back the new deal. They then reached a landmark agreement Sunday for Papandreou to step down and the temporary government to be formed.
Greece has survived since May 2010 on a euro110 billion ($150 billion) rescue-loan program from its eurozone partners and the International Monetary Fund, but all agree it's not enough. A second rescue package has been created that involves private bondholders voluntarily agreeing to cancel 50 percent of their Greek debt.
In return for its bailout cash, Greece has endured 20 months of punishing austerity measures. The efforts by Papandreou's government to keep the country solvent have prompted violent protests, crippling strikes and a sharp decline in living standards for most Greeks.
