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Debt crisis: Greek PM to step down, Eurozone presses for assurance

 Greece's Prime Minister George Papandreou, left, Greek President Karolos Papoulias, center and opposition leader Antonis Samaras sit at the President...

Greece Financial Crisis

Greece's Prime Minister George Papandreou, left, Greek President Karolos Papoulias, center and opposition leader Antonis Samaras sit at the President...

Greek Prime Minister George Papandreou on Sunday agreed to step down and political leaders will meet Monday to form a new coalition government to end the political crisis, Greek president’s office said.

Eurozone finance ministers will also meet Monday to press the future Greek coalition government to roll out tough austerity measures in return for new aid the nation needs to avoid default.

The talks in Brussels follow a dramatic deal in Greece late Sunday, with Papandreou agreeing to step down to make way for a unity government expected to ratify a crucial debt rescue package.

The Eurozone leaders are holding back 8 billion euros (USD$11 billion) in loans from an existing 110-billion-euro bailout until Greece clearly commits to the massive debt reduction deal that was agreed in late October.

“The Greeks must prove that they will really fulfill the conditions,” Belgian Prime Minister Yves Leterme told RTBF television on Sunday.

Papandreou and opposition chief Antonis Samaras were to hold new talks on Monday to find a new prime minister who will head a coalition expected to ratify the rescue package and then lead the country to elections.

The Eurozone rescue deal includes 100 billion euros in new loans for Greece and a debt reduction scheme with banks, which agreed to lose 50 percent of their bond holdings to cut Greece’s debt by 100 billion euros.

But the political wrangling in Athens endangered the deal, angering European leaders who told Greece that it must now choose between leaving and staying in the Eurozone.

With fears mounting that Italy could be the next domino to fall in the crisis, Eurozone ministers are also in a hurry to beef up the firepower of the bailout fund, the European Financial Stability Facility (EFSF),by leveraging its capacity from 440 billion to one trillion euros.


Updated : 2021-05-07 19:10 GMT+08:00