The Greek political saga continues, with crisis talks resulting in a new unity government formed between the ruling party and the opposition in order to end the political deadlock and enact the euro bailout plan. As part of the coalition government agreement, Prime Minister George Papandreou will give up his position, with a new prime minister to be announced tomorrow.

“The quest for a Greek unity government is aimed at avoiding an early, messy debt default and uncontrolled exit from the euro, a prospect that had loomed large in the past seven days’ political turmoil in Athens,” reports The Wall Street Journal.

Greek President Karolos Papoulias moderated the crisis meetings between Papandreou and Opposition Leader Antonis Samaras. The new interim government is likely to rule for several months, with elections not likely to be held before the Greek Parliament approves the bailout plan.

“Disagreement over who might lead a new administration had been cited as the main stumbling block to an agreement,” reported Helena Smith in The Guardian.

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Papandreou was never going to be leader of the interim government. “It is clear this government will pass the baton, but it will not pass it to a void — it will pass it to a new government,” said Papandreou. “I’m not interested in being prime minister in the new government.”

Papandreou’s deputy and finance minister Evangelos Venizelos is the most likely tip for PM, suggests Kerin Hope and Alex Barker in the Financial Times.

It wasn’t just about who would serve as prime minister, write Rrachel Donadio and Niki Kitsantonis in The New York Times:

“… 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 conservative New Democracy 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.”

Papandreou should never have attempted to take the euro bailout plan to a national referendum, says Nikos Konstantaras in The Guardian:

“Here, besides the collapse of the fairytale that being part of the EU is an endless ball, was the essence of Greece’s modern tragedy. Papandreou, in his moment of despair, represented both good intentions undone by personal failings, and the insular political elite whose weaknesses brought Greece to the terrifying brink of bankruptcy and isolation.”

The politics of confusion in Greece looks set to continue, argues the editorial of Greek English newpsaper Athens News:

“Unlike his charismatic father during his three terms of office in the ’80s and mid-’90s, Papandreou jnr too often gives the impression of a man wishing he was somewhere else. And if Samaras gets his way, Papandreou soon will be. However, New Democracy will also require that national elections be called before Christmas, something the current prime minister — as well as the EU leaders — has said he does not want.

The clash over early elections has the potential of being a historical sticking point.”

Regardless of which leader you blame, this debacle was several years in the making, with a draft International Monetary Fund report in mid-2009 noting that Greece’s debt was spiralling out of control and that it could default, until Greek leaders complained and the risks were played down in the finale report. As Landon Thomas jnr and Stephen Castle write in The New York Times, if Europe had moved quicker to bail out Greece, this disaster could have been over months ago:

“What is so remarkable about this episode is that it wasn’t so remarkable at all. The reversal at the IMF was just one small piece of a broad pattern of denial that helped push Greece to the brink and now threatens to pull apart the euro. Politicians, policy makers, bankers — all underestimated dangers that seem clear enough in hindsight. Time and again over the last two years, many of those in charge offered solutions that, rather than fix the problems in Greece, simply let them fester.”