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By Harry van Versendaal
Lucas Papademos, a former European Central Bank vice-president, will head Greece's crisis coalition government, it was announced Thursday.
The new interim government will be sworn in at 2 p.m. on Friday. A statement from President Karolos Papoulias's office said priority of the interim administration would be to adopt and implement Greece's loan agreements with the eurozone and International Monetary Fund (IMF).
The decision was reached after talks at the Presidential Palace between outgoing Prime Minister George Papandreou, conservative opposition leader Antonis Samaras, and rightist party leader Giorgos Karatzaferis.
Communist Party (KKE) leader Aleka Papariga and Alexis Tsipras, the head of the Radical Left Coalition (Syriza) boycotted the meeting.
The interim government is being formed for approximately 15 weeks to secure current bailout funding for the debt-wrecked country and a new a 130 billion euro rescue package from the European Union and the IMF.
Thursday's agreement came after days of byzantine negotiations and embarrassing political theater which appeared to push Greece closer to default and eurozone exit.
Marathon negotiations on a power-sharing deal hit a deadlock on Wednesday night following differences between, as well as within the socialist and conservative parties. But Papandreou and Samaras later agreed on a fresh round of talks for Thursday morning.
“He is a wise person. It is important that he has dealt with substantial issues in the past,” political analyst Antonis Karakousis said of Papademos in an interview with Skai radio on Thursday.
Nikos Xydakis, a commentator with daily Kathimerini newspaper, hailed the decision as “a sigh of relief” following the damaging political saga.
But a fresh round of belt-tightening measures, Xydakis warned, could test Greek society which has over the past few days been “extremely calm and patient,” he said.
Foreign observers also appeared to welcome the deal.
The Athens stock market general index index was up 3.17 percent on Thursday on the prospect of a deal, with Greece's troubled banks gaining 10.2 percent.
But in a sign of the daunting tasks ahead, the national statistics agency ELSTAT on Thursday reported that the unemployment rate increased to 18.4 percent in August from 16.5 percent in July and 12.2 percent a year earlier.
Papandreou has agreed to step down to make way for the new government. In a bow-out address on Wednesday, the PASOK leader said the apparent deal had rescued the country's membership of the euro zone.
"I am proud that, despite the difficulties, we avoided bankruptcy and ensured the country stayed on its feet,» Papandreou said. «I want to wish the new prime minister success, I will support the new effort with all my strength,” he said.
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