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'Greece has a government,' party leader says

June 20, 2012 |  6:32 am

ATHENS -- Three days after a nail-biting election, politicians in Greece have struck a deal on a power-sharing government that will encompass both left and right, a leader of one of the participating parties said.

Evangelos Venizelos, head of the socialist party PASOK, announced Wednesday that "the conditions had been created" for the formation of a ruling coalition to include his party, the smaller Democratic Left group and the conservative New Democracy party, which came in first in Sunday's polls.

"Greece has a government," Venizelos, a former finance minister, said after a second round of talks with Antonis Samaras, the leader of New Democracy.

Samaras is expected to be sworn in as prime minister later Wednesday and to unveil his government lineup sometime before his mandate to form an administration expires around midday Thursday.

His party, together with its traditional nemesis PASOK, is committed to upholding Greece's international bailout deals, albeit with modifications that Athens hopes to win from its European partners. Greece needs the emergency loans to keep on paying its bills, but two years of punishing austerity measures have led to a breathtaking economic contraction and to pleas from Greeks for relief.

Backlash against the austerity cuts boosted the political fortunes of the radical leftist group Syriza, which pledged to abandon the bailout deals. New Democracy’s first-place finish over Syriza in Sunday's election triggered a sigh of relief in many European capitals, which had warned Greece it risked being ejected from the Eurozone, the group of 17 nations that use the euro, if Syriza won.

Nonetheless, the new coalition will try to renegotiate elements of the rescue packages. Six representatives of the three-party coalition -- two from each party -- were meeting Wednesday to thrash out details of the government's negotiation strategy.

A key summit of European Union leaders is scheduled for next week. Venizelos said the meeting "will be the first major battle" for Greece in wresting changes to the bailout terms.


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-- Anthee Carassava, with Henry Chu in London

Photo: Evangelos Venizelos, head of the socialist party PASOK, arrives Wednesday for a meeting with Antonis Samaras, the leader of the New Democracy conservative party, in Athens. Credit: Kostas Tsironis / Associated Press