After days of political wrangling, Greek Prime Minister Giorgios Papandreou has agreed to step down to allow the formation of an interim coalition government including the opposition conservative New Democracy party.
The new cabinet is to be sworn in within a week and its main task will be to implement the terms of the EU's new rescue package agreed on October 26, which will entail further tough austerity measures for Greece.
The country won't hold new elections until February -- a key demand of Papandreou who had insisted that the interim government should remain in office long enough to approve and implement the EU measures. New Democracy had demanded an election within a few weeks because it wanted to profit from its current strong opinion poll numbers. The election is scheduled to be held on February 19.
New Democracy leader Antonis Samaras has more to lose than to gain by joining the cross-party coalition. He will have to drop his outright opposition to Papandreou's austerity measures over the last 18 months, a stance which enabled the party to build up a lead of nine percentage points over the ruling PASOK party.
Even though taking on government responsibility now is a risky move for Samaras, domestic and international pressure on him to agree to a national unity coalition had become too great for him to resist.
Uncertainty May Persist
Despite the change in Athens, there is reason to doubt that the political turmoil in Greece will end. New Democracy can't afford to sign up wholeheartedly to austerity measures that could wreck its election chances next year. It may try to block some of the most unpopular steps the interim government will need to take -- even though the government's room to maneuver is extremely limited.
An added risk is that the politically influential trade unions might mount even stronger opposition now given that the government will contain conservatives. The strikes and protests could become larger and more damaging. Garbage may remain uncollected even longer, electricity could be switched off for days, public sector employees might bring the administration to a standstill. How will a government that is so evidently just the product of a shotgun wedding among political foes survive such public opposition?
Ordinary Greeks, who had followed the political horsetrading with resignation and contempt, seem cautiously optimistic at the outcome. "At last God has shone on them," said Georgia Ioannidou, a shopkeeper in Athens. One radio broadcaster commented: "One hopes it isn't too late. We had the impression the ship was sinking while the crew were beating each other up instead of steering it into a safe port."
The political crisis that cost Papandreou his job stemmed from his tactical error of calling a referendum on the latest EU rescue package, which triggered shock and fury around Europe and threatened to plunge efforts to save the common currency into turmoil.
Uncontrollable Chain of Events
Papandreou had called the referendum because he was utterly convinced of the merits of the deal, which includes a 50 percent debt cut for Greece, and wanted to bolster his domestic standing by securing public approval for it. The opposite happened. He set in motion a chain of events he could no longer control.
"He wanted to calm the public, restore peace in his party and prevent an early election," says Tassos Pappas, a journalist for the center-left Elefterotypia newspaper. He wanted to tighten his grip on power, but he miscalculated, Pappas added.
Papandreou gave a glimpse of how lonely and misunderstood he felt last week when he said in parliament: "We are bearing the cross of suffering even though we are not responsible for the problems."
A different man will now have to bear that burden. Greek newspapers are speculating that Papandreou's successor as prime minister will be the former vice president of the European Central Bank, Lucas Papademos. According to Greek reports, Papademos flew to Athens on Sunday night.