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Greek PM Papandreou proposes unity coalition - state TV Greek PM George Papandreou to form new government
(about 2 hours later)
Greek PM George Papandreou has proposed a unity government as he tries to win support for austerity measures demanded by the EU and IMF, state TV reports. Greek PM George Papandreou is to form a new government as he tries to win support for austerity measures demanded by the EU and IMF.
Some reports said Mr Papandreou had even offered to step down, in talks with opposition leader Antonis Samaras. He will seek to have the government ratified in a vote of confidence in parliament on Thursday, he said.
Mr Papandreou has been facing the risk of a revolt in his Socialist party over the controversial austerity package. Mr Papandreou has faced the threat of a revolt in his socialist Pasok party over the controversial package.
Greek police clashed with anti-austerity protesters near parliament, and unions held a general strike.Greek police clashed with anti-austerity protesters near parliament, and unions held a general strike.
Mr Papandreou is seeking support to push through a new austerity programme of 28bn euros (£24.6bn; $40.5bn) in cuts to take effect from 2012 to 2015. "I will continue on the same course," said Mr Papandreou in a TV address on Wednesday evening. "This is the road of duty, together with Pasok's parliamentary group, its members, and the Greek people."
The government is trying to pass the measures by the end of the month. "Tomorrow I will form a new government, and then I will ask for a vote of confidence."
The EU and IMF are demanding the measures in return for the release of another 12bn euros in aid that Athens needs to pay off maturing debt. Mr Papandreou is seeking to push through a new austerity programme of 28bn euros (£24.6bn; $40.5bn) in cuts to take effect from 2012 to 2015.
In order to avoid default, the government is trying to pass the measures by the end of the month and secure the release of 12bn euros in aid from the EU and IMF.
The conservative New Democracy party reportedly demanded that as a condition of agreeing to a unity government, Mr Papandreou should resign and the terms of the austerity package should be renegotiated.The conservative New Democracy party reportedly demanded that as a condition of agreeing to a unity government, Mr Papandreou should resign and the terms of the austerity package should be renegotiated.
EU commissioners were said to have a "profound sense of foreboding" about Greece and the future of the eurozone, according to leaked account of a meeting on Wednesday seen by the BBC. Development Minister Mihalis Chrysohoidis said it was "wrong to think that a new government could go to Brussels tomorrow and renegotiate everything".
EU commissioners are said to have a "profound sense of foreboding" about Greece and the future of the eurozone, according to leaked account of a meeting on Wednesday seen by the BBC.
'Crucial moment''Crucial moment'
On Tuesday, one member of parliament defected from Mr Papandreou's socialist Pasok party, leaving it with only 155 of the chamber's 300 seats. On Tuesday, one member of parliament defected from Pasok, leaving it with only 155 of the chamber's 300 seats.
At least one other Pasok deputy has threatened to vote against the new programme of cuts and privatisation of state assets, and a number of others are said to be wavering.At least one other Pasok deputy has threatened to vote against the new programme of cuts and privatisation of state assets, and a number of others are said to be wavering.
Mr Papandreou also held talks on Wednesday with Greek President Karolos Papoulias, telling him that "a national effort" was required to push the austerity measures through. Mr Papandreou held talks on Wednesday with Greek President Karolos Papoulias, telling him that "a national effort" was required to push the austerity measures through.
"We are at a historically crucial moment and a time of crucial decisions," Mr Papandreou said, according to a transcript released by his office. "We are at a historically crucial moment and a time of crucial decisions," said Mr Papandreou, according to a transcript released by his office.
"In any case, we will move forward with this sense of responsibility and the necessary decisions." Later, an unnamed official speaking to the Associated Press denied reports that Mr Papandreou had offered to resign in a conversation with opposition leader Antonis Samaras.
Opposition politicians called openly for the prime minister's resignation.
"The most important member of a ship's crew is the captain, and the captain has to go," conservative deputy Theodoros Karaoglou said.
"If we joined forces, we could go to our [creditors] together to negotiate and the results of course would be better."
'Thieves, traitors'
Earlier, thousands of activists and unionists gathered in Syntagma square in Athens, near parliament.Earlier, thousands of activists and unionists gathered in Syntagma square in Athens, near parliament.
Police estimated the size of the crowd at between 20,000 and 30,000, while local media reports put the number higher.Police estimated the size of the crowd at between 20,000 and 30,000, while local media reports put the number higher.
Correspondents said those who turned out represented a broad cross-section of society. "Thieves, traitors!" some shouted. "Where did the money go?"
Some protesters tried to prevent Greek deputies from entering the parliament building to hold a debate on the austerity measures.Some protesters tried to prevent Greek deputies from entering the parliament building to hold a debate on the austerity measures.
Police responded with tear gas, fighting running battles with demonstrators in the surrounding streets. Police responded with tear gas as some protesters lobbed rocks and yoghurt. Some demonstrators threw petrol bombs and slabs of paving during running battles in the surrounding streets. A number of people were injured and several arrested.
A further 20,000 people demonstrated in Thessaloniki, police said.
The general strike was the third in Greece this year.The general strike was the third in Greece this year.
Ports, public transport and banks were badly disrupted by the strike, while hospitals offered only emergency care. Public offices, transport, ports, and banks were badly disrupted, while hospitals offered only emergency care.
The impact of the chaotic scenes in Greece could be seen in international financial markets, with yields on Greece's 10-year bonds reaching a record high of 18.4%.
Eurozone finance ministers failed on Tuesday to agree on how private creditors might contribute to a new Greek bail-out.
Are you in Greece? What is your reaction to Mr Papandreou's proposal? Have you taken part in or witnessed the clashes? Send us your comments using the form below.Are you in Greece? What is your reaction to Mr Papandreou's proposal? Have you taken part in or witnessed the clashes? Send us your comments using the form below.
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