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Greek talks to name interim leader continue Greek PM George Papandreou makes farewell address
(about 1 hour later)
Greece's political leaders are locked in talks for a third day as they continue to hammer out details of a unity government. Outgoing Greek Prime Minister George Papandreou has made his farewell address to the nation, pledging to keep Greece in the euro and respect the terms of the EU bailout deal.
Initial reports that a candidate for PM had been agreed failed to materialise, but sources in Athens have told the BBC a deal has now been reached. Greece's political parties have been holding three days of talks to hammer out details of a unity government.
Details are expected to emerge when outgoing PM George Papandreou meets the president, scheduled for 16:00 GMT. Mr Papandreou gave no indication of who his successor might be but said a new government had now been agreed.
Without a unity government, Greece risks losing an EU bailout. Without the bailout, Greece risks bankruptcy and an exit from the euro.
That would force the country into bankruptcy and a possible exit from the European single currency. Under the terms of the deal, Greece must enact further austerity measures in return for a bailout of 130bn euros and a write-off of half the Greek debt held by private lenders.
Mr Papandreou is now meeting President Carolos Papoulios, and is expected to formally tender his resignation.
Names in the frameNames in the frame
Greece's European partners are stepping up the pressure for a solution. Earlier, sources in Athens told the BBC a deal had been reach on the unity government and an interim prime minister.
A deal was close. Then it was off. Now it is unclear where we stand. The wrangling here is paralysing the country. "Sinking without a captain," reads one headline today. Why the delay? In his address, Mr Papandreou said: "In the next few months, we will do whatever is required, not only to remain in the euro but to take advantage of the benefits of the agreement of 26-27 October [the EU bailout deal]."
One sticking point is the reluctance of the opposition leader, Antonis Samaras, to accept an EU demand to sign a document committing his party to the latest vital bailout package. He says he will back it, but seems to be held back by some of his MPs who oppose the austerity demanded in return for the deal. He also said the new government would tackle tax evasion and bring greater transparency to the public finances.
And then Lucas Papademos, previously considered the frontrunner, is said to want more control over naming ministers. He apparently feels that the 100-day period envisaged for this government is too short. But he did not say who his successor might be.
So new names are being touted and Greece watches and waits. Without political stability here, there can be no resolution of the debt crisis. Greeks are losing patience. "It was obvious that in order to achieve this historic agreement, we would have to find a person who had everyone's support," Mr Papandreou said. "I believe this choice is very important. My role would never be an obstacle to this national unity."
On Wednesday, French President Nicolas Sarkozy spoke by telephone to Mr Papandreou, Mr Sarkozy's office said. A number of candidates have been mentioned to be the potential new prime minister:
Mr Papandreou told the French president that "a new government with the support of the ruling majority and the opposition will be set up imminently", it added.
  • Former European Central Bank vice-president Lucas Papademos was an early frontrunner but later reports suggested his candidacy had run into trouble
  • Vassileios Skouris, president of the European Court of Justice
    •
  • Parliamentary speaker Philippos Petsalnikos, who is also a former justice minister
    •
  • Law professor Ioannis Koukiadis, a former Socialist labour minister, was named by the newspaper Athens News as a possible contender
    •
  • EU ombudsman Nikiforos Diamandouros
  • Panagiotis Roumeliotis, Greece's representative to the International Monetary Fund (IMF)
    •
The name of the interim prime minister and the outline of the unity government are expected to be discussed when Mr Papandreou meets President Carolos Papoulias.
Greek state TV reports that the meeting has been delayed and is now scheduled for 16:00 GMT (18:00 local time).
Government sources have told the BBC that plans for Mr Papandreou to address the nation on television have now been scrapped.
On Tuesday, Greek media speculated that former European Central Bank vice-president Lucas Papademos was about to be appointed interim prime minister.
However, reports emerged that his candidacy had run into trouble.
Other possible candidates being named by the media on Wednesday included Vassileios Skouris, president of the European Court of Justice, and parliamentary speaker Philippos Petsalnikos, who is also a former justice minister.
The Athens News named Ioannis Koukiadis, a law professor and former Socialist labour minister, as a possible contender.
The names of EU ombudsman Nikiforos Diamandouros and Panagiotis Roumeliotis, Greece's representative to the International Monetary Fund (IMF), have also been circulated in the past few days.
Negotiations have been taking place between Mr Papandreou and Antonis Samaras, leader of the biggest opposition party, New Democracy.Negotiations have been taking place between Mr Papandreou and Antonis Samaras, leader of the biggest opposition party, New Democracy.
Adding to the uncertainty, Mr Samaras became embroiled in a row with the EU over Greece's pending bailout programme.Adding to the uncertainty, Mr Samaras became embroiled in a row with the EU over Greece's pending bailout programme.
EU economic affairs commissioner Olli Rehn said he wanted the heads of Greece's two main parties to commit in writing to the terms of the bailouts before Athens could receive the next instalment.EU economic affairs commissioner Olli Rehn said he wanted the heads of Greece's two main parties to commit in writing to the terms of the bailouts before Athens could receive the next instalment.
But Mr Samaras balked at the idea, saying he regarded the rescue deal as "inevitable" but saw no need for a written pledge.But Mr Samaras balked at the idea, saying he regarded the rescue deal as "inevitable" but saw no need for a written pledge.
Greece needs the next tranche from the first bailout - worth 8bn euros (£6.8bn; $11bn) - to avoid running out of money within weeks.Greece needs the next tranche from the first bailout - worth 8bn euros (£6.8bn; $11bn) - to avoid running out of money within weeks.
Last month, EU leaders agreed a separate bailout deal which gives the government 130bn euros (£111bn; $178bn) and imposes a 50% write-off on private holders of Greek debts, in return for deeply unpopular austerity measures.Last month, EU leaders agreed a separate bailout deal which gives the government 130bn euros (£111bn; $178bn) and imposes a 50% write-off on private holders of Greek debts, in return for deeply unpopular austerity measures.