Greek Prime Minister George Papandreou sealed a deal on Sunday with the opposition on forming a coalition to approve a euro zone bailout before early elections, breaking an impasse after the EU demanded a rapid end to the political bickering.
Papandreou agreed to stand down when the new government takes over, the office of the Greek president said in a statement, issued after the European Union gave Greece 24 hours to explain how it will form a unity government to enact its 130 billion euro emergency funding package.
"Today was a historic day for Greece," Greek government spokesman Ilias Mossialos told reporters. A new government would be sworn in and hold a confidence vote within a week if all went to plan, he said.
However, Papandreou's agreement with conservative leader Antonis Samaras was thin on details, with the new prime minister still to be decided.
"Tomorrow there will be new communication between the prime minister and the opposition leader on who will be the leader of the new government," said the statement, which made no mention of how long the interim government would rule.
Papandreou and Samaras -- who were once U.S. college room mates -- had to bury their deep differences and personal animosity, as Greece is deep in economic, political and social crisis, its future in the euro zone is in question, and their reputations among ordinary Greeks are at rock bottom.
"The two leaders had no other choice. If elections were held now, nobody would turn out to vote for them," said Elias Nikolakopoulos, political science professor at Athens University.
"New elections will probably be held at the end of February or early March. They have no time to implement the EU bailout deal before then," he added.
PILING ON THE PRESSURE
Brussels has piled pressure on Athens to approve the bailout, a last financial lifeline for Greece, fearing that its crisis will spill into much bigger euro zone economies such as Italy and Spain -- which would be much harder to rescue.
Papandreou and Samaras had been scrambling to reach a deal before finance ministers of euro countries meet in Brussels on Monday, to show that Greece is serious about taking steps needed to stave off bankruptcy.
Earlier, European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters finance ministers from countries that use the single currency would insist on hearing a plan for a unity government from their Greek colleague Evangelos Venizelos at Monday's meeting in Brussels.
"We have called for a national unity government and remain persuaded that it is the convincing way of restoring confidence and meeting the commitments," he told Reuters. "We need a convincing report on this by Finance Minister Venizelos tomorrow in the Eurogroup."
Many Greeks, who have suffered pay and pension cuts and massive job losses in the past two years, remained distrustful about politicians of all colors.
"Elections won't solve any of our problems now. These parties don't represent us anymore," said Michalis Skevofylakas, 47, a teacher.
Papandreou, who heads the socialist PASOK party, and New Democracy chief Samaras are due to discuss on Monday morning who will be the new prime minister. Greek media tipped Lucas Papademos, a former deputy president of the European Central Bank, as a possible candidate.
President Karolos Papoulias, who led the talks that produced Sunday's deal, will summon the head of all leading parties for more negotiations at 1800 GMT on Monday.
© 2014 Thomson/Reuters. All rights reserved.