After crisis talks on Sunday night, Prime Minister George Papandreou and the Greek opposition leader agreed to create a new unity government that will not be led by Mr. Papandreou, according to a statement released Sunday night by the Greek president, who mediated the talks. Mr. Papandreou and the opposition leader Antonis Samaras agreed to meet again on Monday to hammer out the details of the agreement. The name of the new prime minister is not expected until then.
Mr. Papandreou has faced mounting pressure to resign, including from his own Socilaist Party, so a new unity government can push the European Union’s debt agreement through Parliament, a step European leaders consider crucial to shoring up the euro.
Before the meeting with the president, Mr. Samaras had repeated that he would enter talks on a unity government only if Mr. Papandreou resigned. Mr. Papandreou himself has repeatedly said that he would be willing to step aside for the deal to go through.
But after meeting with his cabinet in the afternoon, Mr. Papandreou said Mr. Samaras would first have to agree to a seven-point plan of priorities that would essentially commit the new government to the terms of the debt deal. The priorities include securing the release of European rescue funds, meeting fiscal targets imposed by foreign creditors, and passing the 2012 budget by the end of the year.
Mr. Samaras’s party has in the past voted against many of the unpopular austerity measures Europe has demanded in exchange for its help, leaving the Socialist government to shoulder the political burden alone.
Mr. Papandreou also insisted that the composition of a unity government must be agreed to before he stepped down.
“It’s clear this government is prepared to hand over the baton, but it can’t hand it over into a vacuum,” he said, according to a transcript of the meeting released to the news media. “It will hand over to the next government, if we agree and decide on it.”
In one scenario being discussed in the Greek media on Sunday, Mr. Papandreou might resign to make way for a unity government of politicians from the Socialist and New Democracy parties be led by a non-political figure. One name being mentioned as a possible leader is Lukas Papademos, a former governor of the Bank of Greece.
But that might set the stage for a power battle between Mr. Papademos and Finance Minister Evangelos Venizelos, who has been reportedly trying to rally support for a government that he could lead.
Mr. Papandreou survived a crucial confidence vote in Parliament in the early hours of Saturday, a vote seen as an endorsement for the debt agreement with the European Union, but which was predicated on the expectation that he would immediately resign.
His failure to do so appeared to leave the government deadlocked, with the opposition calling for early elections and the government insisting that holding elections now would be too destabilizing.
European leaders want the Greek Parliament to pass the new debt deal worked out in Brussels on Oct. 26 and have urged Greek leaders to forge broader consensus, since the governing Socialist party did not seem to be able to pass the law on its own.
The deal would have banks write down 50 percent of the face value of some private Greek debt to help reduce the country’s public debt to 120 percent of gross domestic product by 2020. But it requires the approval of a series of deeply unpopular austerity measures the government has already committed to and imposes a permanent foreign monitoring presence, a development many Greeks see as a loss of sovereignty.
In an effort to allow Greeks to have their say, and to strongarm Mr. Samaras into backing the debt deal, Mr. Papandreou proposed a popular referendum on the agreement last week. After the plan drew the ire of European leaders and threw international markets into turmoil, Mr. Papandreou withdrew the idea.
The about-face may have looked like a defeat for Mr. Papandreou, but he had won support for the debt deal from the opposition.
Opinion polls published in Greek newspapers on Sunday drew different conclusions about whether Greeks preferred a national unity government or immediate elections.
A poll for the centrist weekly Proto Thema found that 52 percent of Greeks favored a unity government that would rule for several months and be chosen by Mr. Papandreou, while 36 percent preferred immediate elections to choose a new government, as proposed by the New Democracy party.
A poll carried for the center-left Ethnos newspaper found a narrower gap in support for the two scenarios, with 45 percent supporting a unity government and 42 percent backing snap elections.
Meanwhile a survey for the center-right Kathimerini found that 66 percent of Greeks supported early elections but in that poll the alternative respondents were asked to consider was a referendum, an option that only 14 percent supported.
Rachel Donadio and Niki Kitsantonis @'NY Times'
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