Greek Prime Minister to Resign Amid Country's Political, Economic Crisis

NEWYou can now listen to Fox News articles!

Greece's embattled prime minister asked the country's president on Sunday to host a meeting between him and the head of the opposition in an attempt to find a way out of a political crisis, as pressure mounts to ensure Greece avoids bankruptcy and remains in the eurozone.

Prime Minister George Papandreou told ministers in an emergency Cabinet meeting that he asked President Karolos Papoulias to convene the meeting Sunday night, his ministers said.

Political leaders are struggling to agree on creating an interim government. Papandreou has said he will resign once power-sharing talks conclude on a replacement.

Conservative opposition leader Antonis Samaras has insisted the resignation come first.

Samaras' party spokesman, Yiannis Michelakis, said that while they were aware of Papandreou's comments, there had been no invitation from the president for talks. If such an invitation were extended to Samaras, he would attend, Michelakis said in a statement.

More On This...

Papandreou narrowly survived a confidence vote in his government Saturday night, mid-way through his four-year term, amid increasing calls from both the opposition and many of his own lawmakers that he resign.

The crisis was sparked after Papandreou's shock announcement Monday night that he wanted to put a new European debt deal aimed at rescuing his country's economy to a referendum. The plan for such a vote caused an uproar in Europe, roiled international markets and led to calls in Greece for Papandreou's resignation, with lawmakers saying he had endangered Greece's bailout.

The prime minister withdrew the plan on Thursday, after Samaras indicated his party would back the new debt deal, agreed on after marathon negotiations in Europe on Oct. 27.

Greece has been surviving since May 2010 on a first $152 billion bailout. But its financial crisis was so severe that a second rescue was needed as the country remained locked out of international bond markets by sky-high interest rates and facing an unsustainable national debt increase.

The new European deal, agreed on by the 27-nation bloc on Oct. 27 after marathon negotiations, would give Greece an additional $179 billion in rescue loans and bank support. It would also see banks write off 50 percent of Greek debt, worth some $138 billion. The goal is to reduce Greece's debts to the point where the country is able to handle its finances without relying on constant bailouts.

Greece's lawmakers must now approve the new rescue deal, putting intense pressure on the country's leaders to swiftly end the political crisis so parliament can convene and put the debt agreement to a vote.

"In these critical moments, the two (main) parties are merely wasting time," said lawmaker Giorgos Kontoyannis, a former New Democracy member of parliament who has joined splinter group Democratic Alliance. "I want to say to my former New Democracy colleagues that our responsibility to our country is individual and not bound by party allegiance."

In return for bailout money, Greece was forced to embark on a punishing program of tax hikes and cuts in pensions and salaries that sent Papandreou's popularity plummeting and his majority in parliament whittled down from a comfortable 10 seats to just two.

Papandreou's government came under renewed threat after his disastrous bid this past week to hold a public referendum on the new $179 billion deal. The idea was swiftly scrapped Thursday after an angry response from markets and European leaders who said any popular vote in Greece would determine whether the country would keep its cherished membership in the eurozone. They also vowed to withhold a critical $11 billion installment of loans from an existing bailout deal that Greece needs urgently to stave off an imminent and catastrophic default.

After the aborted referendum idea, Papandreou's government survived a confidence vote. Now, EU partners and creditors are pressing Papandreou and other political leaders to form a coalition government as a condition to receive any further rescue funds.

Government spokesman Elias Mossialos told state television Sunday that talks have begun and the name of the new prime minister should be known by Monday, in which case Papandreou would resign. Mossialos later told The Associated Press that his remarks regarding a new premier expressed "a personal wish" and are not an official announcement.

Samaras' party denied any talks were taking place "either in the open or behind the scenes."

The socialists and the main opposition New Democracy differ on the duration of such a caretaker government, with the opposition demanding elections within a few weeks and the government saying the coalition Cabinet should last through the end of February.