Greece seals a coalition deal

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Greece seals a coalition deal
The new government will be tasked with implementing the terms of an October EU bailout deal that calls for further harsh austerity measures on Greece, already at breaking point due to a shrinking economy and rapidly rising unemployment.

Greek media earlier tipped Finance Minister Venizelos to take over from Papandreou as the talks got bogged down for almost two days in a dangerous game of brinkmanship, with Samaras insisting on immediate elections, which Papandreou resisted as too risky.

The damaging political stalemate threatened to see the country run out of cash within weeks after European leaders secured their hard-won overall eurozone debt crisis accord at a summit late last month. Greek business and church leaders piled the pressure on politicians to agree a national unity government as quickly as possible, saying the country's future was at stake.

"The future of all of us for the next decade is being decided right now," the Greek federation of enterprises said in a statement yesterday. "

The more the uncertainty lasts, the more the country is literally hanging by a thread," the group said, calling for a "bold compromise of political maturity and national responsibility."

Meanwhile, Constantinos Michalos, head of the Athens Chamber of Commerce, said the stalemate needed to be broken by yesterday, warning otherwise of dire consequences when the financial markets open again today. "A solution is required immediately otherwise the country risks finding itself out of the eurozone tomorrow," said Michalos. Papandreou set the ball rolling on Monday with a shock announcement that Greece would hold a referendum on the terms of its October bailout deal which calls for further fierce austerity measures.

The move stunned fellow European leaders, sent global markets into a tailspin and earned the Greek prime minister a humiliating dressing-down by the France and Germany on Wednesday ahead of a G20 meeting.

Read more about: greece, euro zone, europe, economy
Story first published: Monday, November 7, 2011, 3:30 [IST]
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