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Greece debt crisis: Talks on unity government resume Greece debt crisis: Talks on unity government resume
(about 1 hour later)
Greek politicians are holding a fourth day of talks to name a new prime minister, amid a debt crisis that could lead to the country leaving the euro.Greek politicians are holding a fourth day of talks to name a new prime minister, amid a debt crisis that could lead to the country leaving the euro.
After three days of wrangling on forming a government of national unity, a small party walked out on Wednesday.After three days of wrangling on forming a government of national unity, a small party walked out on Wednesday.
But Greek media report that the former European Central Bank vice-president Lucas Papademos, has re-emerged as the favourite to take the job.But Greek media report that the former European Central Bank vice-president Lucas Papademos, has re-emerged as the favourite to take the job.
It is believed he has won a demand to extend his potential period in office.It is believed he has won a demand to extend his potential period in office.
The leaders of the three main parties making up the government of national unity are meeting with the country's president to try to reach an agreement. Mr Papademos was seen entering the presidential palace later on Thursday morning.The leaders of the three main parties making up the government of national unity are meeting with the country's president to try to reach an agreement. Mr Papademos was seen entering the presidential palace later on Thursday morning.
A deal fell apart on Wednesday after the leader of the smaller party, Laos, disagreed with the choice of parliamentary speaker Filippos Petsalnikos to be the new PM.A deal fell apart on Wednesday after the leader of the smaller party, Laos, disagreed with the choice of parliamentary speaker Filippos Petsalnikos to be the new PM.
He was reportedly seen as being too close to the outgoing PM, George Papandreou and not a candidate of high enough calibre.He was reportedly seen as being too close to the outgoing PM, George Papandreou and not a candidate of high enough calibre.
'Power vacuum''Power vacuum'
Earlier, Mr Papandreou confirmed his socialist party and conservatives would join the coalition - and said the new government would approve the terms of an EU bailout.Earlier, Mr Papandreou confirmed his socialist party and conservatives would join the coalition - and said the new government would approve the terms of an EU bailout.
Without the bailout, Greece risks bankruptcy and an exit from the eurozone.Without the bailout, Greece risks bankruptcy and an exit from the eurozone.
Wednesday's walk-out was yet another twist in the extraordinary political drama that has been unfolding here over the past few days. We thought these were the final talks - we all expected an announcement Wednesday evening, if only to calm the markets before they open. We are still waiting for the white smoke from the Presidential palace. Party leaders are meeting there again to try to agree on the new prime minister. Greece is now in the fourth day of talks. The words "farce" and "political circus" are widely used here.
But the leader of a small right-wing party walked out, apparently in disgust after he said he was presented with a fait accompli about the name of the new prime minister. Lucas Papademos, the former vice-president of the ECB is back in the frame as the frontrunner. He has arrived at the president's residence in a possible sign that a deal is now very close. It's thought he is negotiating a longer term in office than the 100 days previously envisaged before early elections.
All parties appear to have agreed to the main condition, the urgent priority, which is to ratify the latest bailout package for Greece so that this country can receive the next vital instalment of its international loan - 8bn euros which Greece needs by mid-December if it is to stave off bankruptcy and avoid default. In return, reports say he has accepted that the current Finance Minister, Evangelos Venizelos, remain in place.
And so Greece is still without a prime minister when it craves leadership and stability to get it through perhaps the worst financial crisis it has ever known.
Chaos is a Greek word - perhaps aptly.
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.
The BBC's Mark Lowen in Athens says that until the details of the new government are announced there remains a perilous power vacuum in Greece, which is running out of time to resolve its problems.The BBC's Mark Lowen in Athens says that until the details of the new government are announced there remains a perilous power vacuum in Greece, which is running out of time to resolve its problems.
On Wednesday afternoon, in what was expected to be his farewell speech, Mr Papandreou said he wished the new prime minister every success.On Wednesday afternoon, in what was expected to be his farewell speech, Mr Papandreou said he wished the new prime minister every success.
He then left to meet President Carolos Papoulias, who has been brokering talks between three parties expected to join a new government of national unity - Mr Papandreou's Pasok, New Democracy on the centre-right, and the nationalist Laos party.He then left to meet President Carolos Papoulias, who has been brokering talks between three parties expected to join a new government of national unity - Mr Papandreou's Pasok, New Democracy on the centre-right, and the nationalist Laos party.
But the talks then broke down when 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.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.
Former European Central Bank vice-president Lucas Papademos has set new terms to join the new government, Reuters news agency reported.Former European Central Bank vice-president Lucas Papademos has set new terms to join the new government, Reuters news agency reported.
Government sources told Reuters he wanted a greater role for New Democracy in the new government, and the possibility that the coalition could go on beyond the provisional date set for early elections, 19 February. That now appears to have been accepted.Government sources told Reuters he wanted a greater role for New Democracy in the new government, and the possibility that the coalition could go on beyond the provisional date set for early elections, 19 February. That now appears to have been accepted.
A number of other names have been mentioned to succeed Mr Papandreou as prime minister. They include:A number of other names have been mentioned to succeed Mr Papandreou as prime minister. They include:
  • 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)
  • 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.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.
Earlier in the week Mr Samaras was said to have balked at the idea, saying he regarded the rescue deal as "inevitable" but saw no need for a written pledge.Earlier in the week Mr Samaras was said to have 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.