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Greece battles to form 'govt of salvation'

world Updated: Nov 07, 2011 00:41 IST
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Politicians in Greece were engaged in frantic negotiations to form a government of "national salvation" on Saturday in a desperate bid to prevent debt-stricken Athens plunging into bankruptcy and possible exit from the EU.

As Europe's leaders looked on nervously, embattled prime minister George Papandreou visited head of state president Karalos Papoulias to ask to form a broad-based transitional administration that could navigate the country out of its worst crisis in modern times following a week of high political drama.

"My aim is to immediately create a government of co-operation. A lack of consensus would worry our European partners over our country's will to stay in the eurozone," declared Papandreou who hours earlier narrowly survived a vote of confidence in parliament. "Consensus is essential for the country," he said, adding that he was not "tied" to his post and was willing to step aside.

In Greece's bitterly divided political scene forming such a government will not be easy. The battle lines between left and right, shaped historically by a brutal civil war and military dictatorship, remain deep. Papandreou's offer was immediately shot down by the conservative main opposition party, who instead repeated calls for snap elections to be held immediately, a step described as a "disaster" by the socialist premier.

"We've not asked for any place in his government," opposition leader Antonis Samaras said in a TV address. "All we want is for Mr Papandreou to resign because he has become dangerous for the country. We insist on immediate elections."

But a range of smaller groups, including the populist far right Loas party, struggled behind closed doors to overcome differences with the express purpose of creating a government that could secure broad approval for the Greece's latest EU-IMF sponsored aid package and avert financial catastrophe.

Once formed, the administration will have four months to pass crucial legislation, starting with the hard-bargained €130bn (£112bn) debt deal agreed for the cash-strapped nation last week.

The spectre of state coffers drying up by mid-December - schools and hospitals are already fast running out of essentials - has added to the urgency to have the bailout approved by parliament despite widespread anger over the austerity measures the deal inevitably entails.