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Greek government talks deadlocked Greek government talks deadlocked
(40 minutes later)
Talks on forming a new Greek government appear to be deadlocked after the smallest party in the coalition talks walked out on the third day.Talks on forming a new Greek government appear to be deadlocked after the smallest party in the coalition talks walked out on the third day.
The office of the Greek president now says the talks will resume on Thursday.The office of the Greek president now says the talks will resume on Thursday.
Earlier, outgoing Prime Minister George Papandreou made what was expected to be his farewell address to the nation, pledging that the new government would respect the terms of an EU bailout.Earlier, outgoing Prime Minister George Papandreou made what was expected to be his farewell address to the nation, pledging that the new government would respect the terms of an EU bailout.
Without the bailout, Greece risks bankruptcy and exit from the euro. Without the bailout, Greece risks bankruptcy and an exit from the euro.
Under the terms of the deal, Greece must enact further austerity measures in return for a bailout of 130bn euros (£111bn; $178bn) and a write-off of half the Greek debt held by private lenders.Under the terms of the deal, Greece must enact further austerity measures in return for a bailout of 130bn euros (£111bn; $178bn) and a write-off of half the Greek debt held by private lenders.
'Strategy games'
On Wednesday afternoon, Mr Papandreou made a televised speech in which he said he wished the new prime minister every success. However, he did not disclose his successor's name.On Wednesday afternoon, Mr Papandreou made a televised speech in which he said he wished the new prime minister every success. However, he did not disclose his successor's name.
He then left to meet the president, who was brokering talks on three parties expected to join a new government of national unity: his own centre-left Pasok, New Democracy on the centre-right, and the nationalist Laos party.He then left to meet the president, who was brokering talks on three parties expected to join a new government of national unity: his own centre-left Pasok, New Democracy on the centre-right, and the nationalist Laos party.
But the talks then broke down. The BBC understands this was because Laos walked out. But the talks then broke down when Laos walked out.
As he left the presidential palace, Laos leader Giorgios Karantzaferis told reporters it was sad to see that even at this critical moment, there were strategy games taking place between Mr Papandreou and New Democracy head Antonis Samaras.
When asked if there was a deal on a new government, Mr Karantzaferis did not reply.
The name of the new prime minister was due to have been announced after the meeting. A new government would have been sworn in.
The BBC's Mark Lowen, in Athens, says there is now a perilous power vacuum in Greece, which is running out of time to resolve its problems.
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]."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]."
He also said the new government would tackle tax evasion and bring greater transparency to the public finances.He also said the new government would tackle tax evasion and bring greater transparency to the public finances.
A number of names have been mentioned to succeed Mr Papandreou as prime minister. They include:
  • Former European Central Bank vice-president Lucas Papademos, an early frontrunner; however, later reports suggested his candidacy had run into trouble
  • Parliamentary speaker Philippos Petsalnikos, who is also a former justice minister
  • Vassileios Skouris, president of the European Court of Justice
  • 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)
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.
Greece needs the next tranche from the first bailout - worth 8bn euros (£6.8bn; $11bn) - to avoid running out of money within weeks.