Forex News – Greek PM agrees to step down and form new coalition government

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Greek Prime Minister George Papandreou agreed on Sunday to form a new coalition government and step down to allow a new leader to govern the debt ridden country.

Papandreou met with Antonis Samaras, leader of the main opposition New Democracy party on Sunday and agreed to form a national unity government that will lead the country to new elections but only after putting in place the controversial 130 billion euro bailout deal that was reached at the EU Summit on October 27.

Talks were chaired by President Karolos Papoulias who announced to reporters “At their meeting, the two leaders have agreed to form a new government that will aim at leading the country to elections after implementation of decisions from the European Council on Oct. 26”.

On Monday there will be a meeting of Greece’s political-party leaders to seek their backing for the unity government and discuss who will lead it.

No more details or a timeline of future events were disclosed, beyond that new national elections will be held sometime after the bailout is implemented. Earlier Sunday, Samaras told reporters that once Papandreou resigns everything will “take its course” and “everything else is negotiable.”

Today’s decision helps eliminate another road block and uncertainty for markets. Last week was tumultuous after the Greek PM announced he wanted to hold a referendum on the bailout deal. This angered European leaders and caused the euro to tumble, but soon this plan was scrapped to the relief of all. On Friday night, Papandreou won a confidence vote in parliament and on Sunday a deal was reached for him to step down.