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Power Sharing Talks In Greece Drag On

ATHENS, Greece (AP) — Greece will get a new prime minister later Tuesday, senior government officials said, as the country’s European partners ratcheted up the pressure for a swift resolution to the political crisis.

Talks between current Prime Minister George Papandreou and opposition leader Antonis Samaras have dragged into a second day as they try to hammer out a power-sharing deal. The two agreed over the weekend to forge an interim government that will shepherd the country’s new €130 billion ($179 billion) European rescue package through Parliament.

Without the deal, agreed less than two weeks ago, Greece would go bankrupt, potentially wrecking Europe’s banking system and sending the global economy back into recession.

By Tuesday afternoon there were still no precise details of when the new interim prime minister would be announced but the pressure was increasing on Greek politicians to make decisions soon. There was mounting speculation that a former deputy at the European Central Bank, Lucas Papademos, may replace Papandreou.

“It must finish today. The only thing that counts is that we save the country,” a senior Cabinet official said. “From the moment that Mr Samaras made the decision and supported this effort, he has been behaving impeccably and we are with him.” The official spoke on condition of anonymity to discuss sensitive negotiations.

Another senior government official said Greece’s eurozone partners are demanding that five top Greek officials co-sign a letter reaffirming their commitment to the country’s bailout deals and economic reforms, in return for the release of a vital €8 billion ($11 billion) loan installment later this month. He said those officials are Papandreou and Samaras, the Bank of Greece governor, the new prime minister and the new finance minister.

Earlier, the country’s ministers offered their resignations to Papandreou to pave the way for the creation of the interim government, which is only expected to last until Feb. 19.

“We have made our resignation available to the prime minister in order to help him with his actions,” Tourism Minister George Nikitiadis said. “My feeling is that tonight we will have a name (of the new premier). It’s going well.”

The political crisis erupted last week, when Papandreou said he would put the new European rescue package to a referendum, and the country’s international creditors froze the payment of the next installment from Greece’s current loans.

Papandreou withdrew the plan Thursday after Samaras indicated he would back the new deal. But frustrated with the political turmoil in Greece, the international creditors have maintained the pressure even after the public vote idea was officially canceled.

Papandreou and Samaras reached a landmark agreement late Sunday for Papandreou to step down and the temporary government to be formed. The new prime minister would serve until an early election is held next year, with the most likely date being Feb. 19, the finance ministry has said.

None of the people being considered have been announced publicly.

“The country cannot take these petty political games any longer,” said Dora Bakoyannis, a former foreign minister and conservative party lawmaker who was expelled from the party for breaking ranks and voting in favor of an earlier austerity plan. She has now formed her own party.

“The problem is not finding serious candidates, but whether those candidates will be allowed to do their job and not asked to be puppets,” she added.

Greece has survived since May 2010 on a €110 billion ($150 billion) rescue-loan program from its eurozone partners and the International Monetary Fund, but all agree it’s not enough. A second rescue package has been created which involves private bondholders who have agreed to cancel 50 percent of their Greek debt.

Though Greece has been locked out of long-term bond markets because of excessively-high interest rates, it has maintained a limited present in the market for short-term cash. It raised €1.3 billion in 26-week treasury bill auction Tuesday.

In return for its bailout cash, Greece has endured 20 months of punishing austerity measures. The efforts by Papandreou’s government to keep the country solvent have prompted violent protests, crippling strikes and a sharp decline in living standards for most Greeks.

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